- Institutional shareholders to sign up to a Stewardship Code, sponsored by the Financial Reporting Council with compliance monitored by the Financial Services Authority (the Code on the Responsibilities of Institutional Investors prepared by the Institutional Shareholders’ Committee will become the Stewardship Code)
- Annual re-election for the chairman of the board
- The chairman of a major bank should be expected to commit a substantial proportion of his or her time, probably around two-thirds, to the business
- An expanded role for the remuneration committee with regard to firm wide remuneration policy and "high end" employees
- Disclosure, within remuneration bands, of the number of "high end" employees (including executive directors)
- Deferral of incentive payments should provide the primary risk adjustment mechanism to align rewards with sustainable performance for executive board members and “high end” employees
- If the remuneration report receives less than 75% of the votes cast the remuneration committee chair should stand for re-election in the following year
- Greater expectations placed on non-executive directors regarding time commitment and tougher scrutiny by the Financial Services Authority
- Banks should have a board level risk committee chaired by a non-executive director
- The chief risk officer should have a reporting line to the risk committee and his or her removal should require board approval
Related video and audio resources: Sir David discussed his recommendations on the Radio 4 Today programme this morning: listen here. The BBC News website has a short video of Sir David discussing remuneration here. A video of Sir David's appearance before the Treasury Committee, where he was questioned on his review, appears here.
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