Revised Corporate Governance Code issued

This week the Financial Reporting Council launched governance the June 2010 revision of The UK Corporate Governance Code. While it is essentially obligatory for UK listed companies, its influence extends further as best practice or more – the previous versions have rippled through the public and third sectors informing both regulatory expectations and self-regulated codes of governance.

I will not try to summarise it prematurely. However, there do not appear to be any radical changes although some may ask why not given the recent problems at UK plc. For me a couple of issues stand out in the revised Code.

Firstly, the Code requires the boards of FTSE 350 companies to have externally facilitated evaluations at least every three years. This should, hopefully, lead to more rigorous self-reflection.

Secondly, the Code continues to promote board renewal with board members nudged to stand down after nine years. The Consultation queried the so-called “nine year rule”. (This still allows a degree of flexibility: non-executives can serve more than nine years but are subject to annual re-election.)