The government has welcomed new measures to encourage accountability, diversity and improved performance in Britain’s boardrooms, as the Financial Reporting Council launched a revised Corporate Governance Code.
The new measures include a recommendation that all directors of FTSE 350 companies be put up for re-election every year and promote the benefits of diversity in new appointments to the board.
Business Minister Edward Davey said:
“Corporate accountability and transparency is integral to rebuilding public trust in the corporate sector and today’s new Corporate Governance Code marks an important step towards rebuilding that trust.
“Alongside the pledges this Government has made to encourage gender equality on the boards of listed companies, these new measures will help to encourage companies to play their part in working towards the creation of a more responsible, fair and transparent corporate society.”
Equalities Minister Lynne Featherstone said:
“Half of all consumers are female but only 12 per cent of FTSE 100 directors are, so I’m pleased to see the FRC recognising the need to get more women into the boardroom. A more equal workplace is a more successful workplace and the stronger provision on gender diversity in the new Code is an important step towards building a fair and equal society by tackling discrimination at work.”
The UK Corporate Governance Code sets out standards of governance for listed companies. Companies are required either to follow the Code or explain how else they are acting to promote good governance. The new edition of the Code will apply to financial years beginning on or after 29 June 2010.