RSS feedsTwo-thirds of the UK’s 350 biggest companies still don’t claim full compliance with the provisions of the combined code of corporate governance, according to research carried out by Grant Thornton, with just 10% providing the appropriate explanations when they do not comply.
While there has been an improvement on the level of compliance from last year, the figures are still relatively low, with just a 2% improvement among the FTSE-100 and 8% for the FTSE-250.
According to Simon Lowe at Grant Thornton, non-executive directors have a responsibility to “stand and challenge the board to clarify why departure is better for the company and their stakeholders than full compliance”.
The most common areas for departure from the code were with the terms and conditions of the appointment of non-executives, certain aspects of internal controls and audit committee independence and financial experience. Because internal control relies on companies applying judgement rather than applying the code as a straight yes or no, discrepancies can creep in.
It wasn’t, however, all doom and gloom, with some key areas of improvement –
notably with the description of the work that nomination committees undertake
and disclosure relating to the annual performance appraisal of the chairman.
www.gtuk.com
