UK: FRC chief executive on the new governance and stewardship codes

Stephen Haddrill, the chief executive of the Financial Reporting Council, yesterday delivered the keynote speech at ICSA's corporate governance conference. In his speech - available here (pdf) - Mr Haddrill commented on the FRC's recent review of the Combined Code and its work developing the Stewardship Code. He stated that a revised corporate governance code would most likely be published in May. He also made this important point:

No code or regulation can ever be an adequate substitute for an effective board. We have to entrench governance in the spirit of the boardroom, not in compliance with rules. I would even argue that, for some companies and some investors, compliance with the Code provided false comfort that governance was adequate. And this is very damaging if it discourages boards from thinking about governance in the context of the particular challenges facing their company. Compliance with the Code is not a substitute for proper leadership by the board or proper scrutiny by shareholders".