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Firms selective on code compliance.

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Vincent
PositionBrief Article

The updated Combined Code is already having a positive effect on the relationship between companies and their investors, according to the Financial Reporting Council (FRC).

Investors report that the amount of dialogue with firms Ms increased and there are signs that chairmen are getting more involved in corporate governance issues, the FRC claims. Some companies have already stated their position in relation to the code in their 2004 annual reports a year before the deadline.

In an informal assessment of how the code is being implemented so far, the FRC has found that both investors and companies feel that corporate governance has improved over the past year. The council will publish a more comprehensive overview later this year. But separate research into boardroom standards paints a less encouraging picture. A survey of 300 firms by HR consultancy Wickland Westcott found a reluctance to follow the Higgs review's recommendation that boards conduct a "rigorous" annual review of their own performance.

Only 5 per cent of...

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