The FRC now has responsibility for two 'comply or explain' codes: the UK Corporate Governance Code for listed companies, last revised in 2010, and the new Stewardship Code for investors, launched in the same year. The report is the first in what is intended to be an annual series of reports on their effect.
The report reveals the high level of take up of the new provisions announced last year. For example, 80 per cent of FTSE 350 boards have put all their directors up for annual re-election, demonstrating, the FRC believe, the value of the UK Corporate Governance Code in promoting behavioural change in the boardroom.
Over 230 asset managers, asset owners and service providers signed up to the Stewardship Code in its first year, including most of the major investors in UK equities. The report highlights evidence that the quality of engagement between investors and company boards is improving in certain areas, for example in discussions around corporate risk. The FRC believes this is a solid platform on which further progress should be made in the coming year.
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