FRC to review combined code

The FRC has begun a review of the effectiveness of the Combined Code on
Corporate Governance with the launch of a consultation on whether the ‘comply or
explain’ approach is working effectively

Sir Bryan Nicholson, chairman of the FRC, said it was ‘appropriate’ to
investigate whether difficulties had emerged in the implementation of the Code
as this was the first year that listed companies were applying its principles.

Nicholson stressed that the review was not an exercise that would result in a
‘new Combined Code’, and that changes would only be made if there was ‘strong
consensus’ that they were required.

‘We know from experience that it takes time for new corporate governance
codes to bed down and for best practice to become general practice,’ Nicholson
said. ‘We also recognise that listed companies are already dealing with
significant changes in corporate reporting and governance requirements and do
not wish to add to those unnecessarily.’

The FRC is seeking the views of listed companies, directors and investors.
The quango will publish its findings at the end of 2005. If any changes to the
Combined Code are recommended, a separate consultation will be held early next

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