FRC's revised corporate governance code
Fiona Hathorn, Managing Director Women on Boards UK, July 2018
The long awaited, revised, Financial Reporting Council’s (FRC) corporate governance code has now been published and is available within WOB’s Resource Centre. This new code, according to the FRC, has been designed set ‘higher standards of corporate governance to promote transparency and integrity in business as well as attract investment in the UK for the long term, benefitting the economy and wider society’.
Having read the new code, it is clear the FRC along with the PRA (Prudential Regulator Authority) and the FCA (Financial Conduct Authority) are putting ‘values’ and ‘culture’ firmly on the board agenda. So large listed companies are expected now to have a clear purpose and strategy aligned with a healthy corporate culture, alongside a high quality board composition and a focus on diversity. To help ensure registered directors know what they mean the FRC have published, alongside the revised code, ‘Board Effectiveness’ guidelines. This guide is well worth reading and as with the new code can be download in full via the link below;
Within the Board Effectiveness Guidelines you will find lots of suggested questions and recommendations as per this image taken from the report.
Source: FRC’s Board Effectiveness, guideline report
All good stuff but honestly I am disappointed because it would seems there is still no will within the FRC or the regulators for that matter to force listed public companies to transparently advertise board positions. Yes, I know that best practice is to use a head hunter for all NED searches but who cares? They in general don’t make their searches public, preferring instead to hold their chips close to their chests, fearing that someone that they don’t know might apply which will lead to a longer and more expensive recruitment process.
Honestly if you really do want to focus on diversity, and the benefits, it is about time we turn off the spot light currently focused on a minority of people who have had listed board experience, and use a floodlight to identify new talent across the world who have interesting and very different transferable board skills.
At Women on Boards UK (WOB UK) we believe that if you are listed you should be forced to advertise all NED vacancies on the FRC’s website, similar to the public appointments website, and if you don’t you should have to explain why. This would, we believe, result in more diversity of thought on boards to ensure that listed companies do balance better the needs of their shareholders, employees and wider society and thus the long term survivability of the company.
As you know we advertise board vacancies for FREE – why wouldn’t we? – and as a result we have helped many women and some men, like Paola Bergamaschi Broyd. Paola has with our support join 3 boards recently; Big Society Capital, BNY Mellon International and Wells Fargo International. All of these organisations bravely advertise their board positions on our website. Without this information Paola would not have known about any of the NED vacancies with a possible exception of the first which is a government body.
Do take a look at our OnBoard success log to view over 1000 board successes (link), and consider your vacancy board seats.
So thank you BNY Mellon and Wells Fargo for being transparent and open organisations, we salute you.