FSA has responded to the Commission's green paper on corporate governance. The response emphasises FSA's belief that a change in supervisory culture can be as effective as new rules in changing firms' behaviours. It stresses its preference for outcome-focused rules, which generally would not be prescriptive. Specifically, it says there should be a proportionate approach so smaller firms do not need to meet the same solutions as larger ones. It gives as an example the proposal to mandate separation of the chairman and CEO functions. It also feels that to set a limit on the number of non-executive directorships an individual can take on is the best way to ensure any NED devotes sufficient time to any one firm. The paper answers the specific questions the Commission asked and supports harmonisation between sectoral directives, but stresses the need to apply proportionality.
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FSA responds on corporate governance
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