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Code changes 'put directors under the microscope'
Accountancy News |
28/05/2010
UK businesses are set to face a more strict corporate governance regime following changes made by the Financial Reporting Council (FRC).
The body has made a series of alterations to the UK Corporate Governance Code - formerly known as the Combined Code - in a bid to increase the accountability of company boards to their shareholders.
Firms will be required to diversify at directorial level, make clearer statements with regards risk responsibilities, and within the FTSE 350, put all board members up for re-election each year.
Under the revamped code, performance-related pay must be aligned to the long-term interests of the company.
Baroness Hogg, chairperson of the FRC, said the institution had reconfirmed the core principles of the code and the flexibility provided by the 'comply or explain' approach.
She stated: "The changes we have made are designed to reinforce board quality, focus on risk and accountability to shareholders."
The new edition of the UK Corporate Governance Code will apply to any company whose financial year begins on or after June 29th 2010.
Posted by Stephen Wilkinson
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