The Financial Reporting Council has asked the Institute of Chartered Secretaries and Administrators to develop guidance on board effectiveness to complement the UK Corporate Governance Code.
An ICSA steering group published an initial consultation on the scope of the guidance in March 2010 and has now published a second consultation seeking comments on the form of the guidance.
The guidance focuses on the main issues concerning implementation of the principles on boards in sections A and B of the UK Corporate Governance Code, focusing on the role of the chairman in creating the conditions for overall board and individual effectiveness. The guidance also addresses board decision making, board composition (diversity of psychological type and of personal attributes being factors to consider), induction and development programmes for directors, bespoke board evaluation processes and communications with shareholders.
In relation to shareholder communications, the guidance stresses the importance of using the annual report and accounts to give a clearer picture of governance arrangements, including overseeing the delivery of strategy and the key risks associated with this.
ICSA seeks comments by 14 October so that final guidance can be submitted to the FRC in the following month. The FRC plans to publish final guidance by the end of the year.
Click here for ICSA’s consultation.
Click here for the accompanying press release.
