The UK corporate governance code

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“We recommend that companies should wholeheartedly adopt the spirit of the new Code, take control of the situation and reap its benefits.” Craig Scarr, Partner, Corporate Governance and Risk Management.

The new Corporate Governance Code, issued by the FRC, came into effect in November 2003 and was updated in June 2010. The Combined Code guidelines for sound governance are now officially part of the London Stock Exchange’s listing rules and must be applied by all companies with a premium listing of equity shares whether or not they are incorporated in the UK.

Key new themes:

· Leadership – An open culture promoting debate, strong leadership from the Chairman and a Senior Independent Director, striving for long term success of the company and NED’s constructively challenging the company strategy.

· Effectiveness – All Directors must be sufficiently experienced and have sufficient time to exercise their duties, all Directors should have personalised training and development for their roles, external evaluation of the board should be externally facilitated every 3 years and the Chairman or all Directors should be subject to annual re-election by shareholders.

· Accountability – The board is responsible for defining the company’s risk appetite and tolerance, that appropriate measures are in place to identify and evaluate and manage the significant risks faced by the company.

· Remuneration – Executive Directors salaries should be designed to promote the long term success of the company, remuneration should be compatible with risk policies and paying of bonuses should be risk adjusted and consideration should be given to the use of remuneration claw-back provisions in exceptional circumstances.

· Communication – greater communication between the board and shareholders.

Mazars can offer a wealth of experience to companies that must comply with these guidelines - from overall project management to complementing your staff with a Mazars team.