HM Treasury has published its fi nal report and recommendations of Sir David Walker’s review of corporate governance in UK banks and other fi nancial industries entities. Amongst the recommendations are:
- Strengthen the role of non-executive directors and give them new responsibilities to monitor risk and remuneration
- Require non-executive directors of FTSE 100 listed banks or life assurance companies to invest a greater time commitment – a minimum of 30 to 36 days
- Strengthen the FSA’s interview process for non-executive directors proposed for FTSE 100 listed banks or life assurance companies so that it involves questioning and assessment by one or more senior advisers with relevant industry experience
- Introduce a new Stewardship Code to require institutional investors and fund managers to play a more active role as owners of businesses
- Make the FSA responsible for monitoring compliance with the Stewardship Code
- Extend the role of the remuneration committee to cover fi rm-wide remuneration policy and give the committee oversight of all “highend” employees
- Require the disclosure of the number of “high-end” employees for FTSE 100 listed banks and comparable unlisted entities
- Similar disclosure requirements for FSA-authorised banks that are UK subsidiaries of foreign entities.
Alistair Darling has commented that “Sir David’s proposals are the blueprint for how banks must be run in the future. His interim report recommended changes to control bonuses that have already become part of a global standard agreed by the G20. The Government strongly supports his recommendations and will take steps to implement them as soon as possible”.