whats the right codes

I’m assuming this is a natural fireplace, i.e. firebrick lined interior, full masonry, no insert. General rule of thumb is to keep all combustibles at 6” away from the side edges and 12” above the to edge of the firebox opening. This is on the face of your fireplace. As for covering up the wood framing above the brick, cement backer is an excellent idea but not required. You’ll have less problems using that rather than using drywall.
Post some pics and we can get a better idea what your looking at.

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