Derek Higgs, independent business adviser, said non-executive directors should come from a wider pool of candidates, get more training and take a more important boardroom role.
In addition, he argues that at least half of board members should be independent of management and work to improve their relationship with shareholders.
He also recommends separation of the role of chairman and chief executive, and says the latter should never become chairman in the same company.
At the presentation of his report, Higgs said his new code would ‘not provide a cast-iron guarantee that nothing will go wrong’ and that it is a guideline rather than a ‘prescription’.
Higgs was appointed by chancellor Gordon Brown and Patricia Hewitt, secretary of State for Trade and Industry, to lead an independent review into the role and effectiveness of non-executive directors.
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