FRC to agree to diluted governance code
The Financial Reporting Council is to meet on Wednesday to agree on a final version of a combined code of corporate governance that is set to water down the controversial proposals in the Higgs report.
The ‘comply or explain’ requirement is also to be scrapped. ‘Mechanistic’ evaluations of corporate governance will be avoided, in favour of dialogue.
Under the new code, company chairmen will be expected to head nominations committees when the original code said they should not do so.
The role of senior independent director will also changed. Whereas in the original version, the SID was to meet with shareholders regularly and chair meetings with non-executive directors without the chairman present, they now will only have to ‘keep in touch’ with shareholders views and meet with NEDs without the chairman present once a year.
Smaller companies, below the FTSE-350 will have more relaxed corporate governance rules. For instance, they will now be required to have two NEDs instead of a 50% representation.”/>