BusinessCompany NewsHiggs proposals set for approval

Higgs proposals set for approval

A revised draft of the Combined Code on corporate governance, which includes controversial recommendations from the Higgs report, is due to be put forward for approval today by the Financial Reporting Council.

Link: Higgs report in-depth

The language of the new draft was expected to have changed significantly since the original draft was published, though as Accountancy Age revealed earlier this month the substance of the proposals was not expected to alter. However, the new wording was predicted to be much less prescriptive, offering more flexibility for companies putting the recommendations into practice.

The first draft was seen by many in the industry as too rules-based. The council had the option to ask for further work to be undertaken on the draft put forward yesterday, but it is expected that the new wording of the code will receive a more favourable reaction.

Banks and representatives of UK business had objected particularly to the recommendation that the chief executive and chairman positions at a company should not be held by the same individual. Following intense lobbying, the draft was changed to say that if a board feels the chief executive is the best person for the role of chairman, then it should consult its shareholders and explain its reasons to them.

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