The UK combined code for corporate governance, as drafted in the Higgs report, had been due to take effect on 1 July. But the FRC is yet to approve the measures.
Accountancy Age has learned that members of an FRC working group will not consider a new draft until a special meeting on 23 July. If all the members agree it could be published on the same day. But if further redrafting is needed, publication will be postponed, according to FRC assistant secretary Charles Bridge.
‘It became obvious early on that our original deadline was wrong. There has been a lot of agitation about the Higgs draft, and a more substantial consultation process than we anticipated has happened,’ Bridge said.
Despite coming under pressure to tone down Higgs’ original proposals, Accountancy Age understands that the thrust of the original code will stand, with only the wording amended.
Bridge said the FRC would not yield to pressure from business because the Higgs report was ‘basically good’ and its content was ‘substantially interesting’.
Peter Wyman, former ICAEW president and a member of the FRC working group, said the group had already made some minor changes in May. Wyman said the group wasrewriting the code to ‘increase the principles and reduce the number ofprovisions’ to create a better environment in which companies can ‘complyor explain’.
He argued this would create more flexibility but within a clear framework: if a company does not comply with the code, it must explain why.
Derek Higgs confirmed that it was his understanding that the FRC working group was currently refining the code, but would leave its ‘essentials’ unchanged.
Commissioned by the government, Higgs published his report in January 2003. The report has formed the foundation for the combined code of principles of good governance and code of best practice.
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