INSTITUTIONAL SHAREHOLDERS WELCOME THE

NEW Combined Code

The Institutional Shareholders’ Committee today welcomed the final version of the Combined Code on Corporate Governance released by the Financial Reporting Council.   The new Code will advance the UK’s framework for corporate governance, and encourage the highest standards of boardroom practice and professionalism of boards’ directors.  Boards should be encouraged to adopt the Code as soon as practical. 

Richard Saunders, Chief Executive of the Investment Management Association, said:

“The Financial Reporting Council is to be congratulated on a final version of the Code which stands every chance of commanding widespread acceptance.  We do, however, need to be realistic about the prospects for asset managers, who may invest in anything up to 1,000 UK companies, being able to attend each company’s AGM.”

Ken Ayers, the National Association of Pension Funds Investment Council Chairman, added:

“The National Association of Pension Funds was among the first to welcome the Higgs review when it was originally published, although we were concerned that some of the proposals, when translated in the revised Combined Code appeared too prescribed. I believe that with the publication of the final version of the Code, this has now been rectified. I am delighted to discover that so many of our suggestions have been included and believe that the result will significantly improve corporate governance without being too prescriptive"

Daniel Godfrey, Director General of the Association of Investment Trust Companies, commented:

“The new Combined Code is a big step forward in providing boards and shareholders with a blueprint for activity, thought and discussion.  The prize is better corporate performance and both Derek Higgs and the Financial Reporting Council have made a significant contribution to that goal.  The Code recognises that investment companies need not always follow the Code, due to their different board structures.  The Association of Investment Trust Companies has this week published a code for its member companies which deals with those differences and ensures that there are no gaps.”

Mary Francis, Director General of the Association of British Insurers, said:

“The new Code contains the essence of the Higgs report, while avoiding the strait-jacket of excessive prescription.  Companies and investors now need to put their differences behind them and move forward together to implement this Code in a constructive way.”

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For further information and comment, please contact:

Leonie Edwards, ABI, 020 7216 7411

Annabel Brodie-Smith, AITC, 020 7282 5580

Clare Arber, IMA, 020 7831 0898

Andy Fleming, NAPF, 020 7808 1300

Note to Editors:

1. The ISC comprises the Association of British Insurers, the National Association of Pension Funds, the Association of Investment Trust Companies and the Investment Management Association, between them accounting for the majority of institutional investment in the UK.  

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Investment Management Association is a company limited by guarantee registered in England and Wales Registered number 4343737.  Registered office as above.