FRC has updated its Corporate Governance Code for listed companies. The changes mainly reflect:
- a clearer statement of the board's responsibilities on risk assessment so the board must understand the company's business and decide what risks it is willing to take;
- greater emphasis on the importance of getting the right mix of skills and experience on the board; and
- a recommendation that all directors of FTSE 350 companies be put up for re-election every year.
FRC says it expects to see greater shareholder engagement following the changes. The code will apply to financial years starting from the end of June. BIS and CBI welcomed the changes, although CBI questioned the introduction of annual re-election, which it said might put too much focus on short-term results.