The Financial Reporting Council has today published a final report following its review of the Combined Code on Corporate Governance. A consultation paper has also been published setting out proposed changes to the structure and content of the Combined Code, including the recommendation that it should be renamed the UK Corporate Governance Code. A copy of the proposed new Code is included in the consultation paper. It contains new sections on leadership and accountability and a greater emphasis is given to the long-term success of the company. For example, the recast preamble/introductory section begins:
The purpose of corporate governance, supported by the Code, is to facilitate efficient, effective and entrepreneurial management that can deliver growth in shareholder value over the longer term".
Amongst the FRC's other proposals are:
- the annual re-election of the chairman or the entire board
- new principles concerning leadership by the chairman and the role, skills and independence of the non-executive directors (including their time commitment)
- board evaluation reviews should be externally facilitated at least every three years
- the chairman should hold regular development reviews with each director
- new principles on the board's responsibility for managing risk.
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