The Financial Reporting Council today issued a call for evidence as part of its review of progress in implementing the 2003 version of the Combined Code on Corporate Governance.

The FRC is inviting views on issues such as the overall quality and level of dialogue between boards and investors, whether ‘comply or explain’ is working successfully, and whether companies have experienced any practical difficulties in attempting to implement the new requirements in the Combined Code. Views are sought from listed companies, directors, investors and other interested parties.

Announcing the call for evidence Sir Bryan Nicholson GBE, chairman of the Financial Reporting Council, said:

“Listed companies are reporting for the first time this year on how they are applying the 2003 version of the Combined Code, so it is appropriate to look at how they are doing so and whether any practical issues have emerged in implementing the Code.

“This is a review of progress to date, not an exercise that will result in a new Combined Code. We know from experience that it takes time for new corporate governance codes to bed down and for best practice to become general practice. We also recognise that listed companies are already dealing with significant changes in corporate reporting and governance requirements and do not wish to add to those unnecessarily. Changes to the Code will only be considered if there is a strong consensus that they are needed.”

The FRC will publish it findings at the end of 2005. If any changes to the Combined Code are recommended, there will be a separate consultation in early 2006.

1. The Financial Reporting Council (FRC) is a unified, independent regulator. Its aim is to promote confidence in corporate reporting and governance. The FRC’s five operating bodies are: the Accounting Standards Board, the Auditing Practices Board, the Financial Reporting Review Panel, the Accountancy Discipline and Investigation Board and the Professional Oversight Board for Accountancy. The Council is responsible for the FRC’s work on corporate governance and is assisted by a Committee on Corporate Governance, whose members are drawn from the Council.
2. The 2003 version of the Combined Code applies to all financial years beginning on or after 1 November 2003. It operates on the basis of ‘comply or explain’, i.e. listed companies must comply with its provisions or provide an explanation in their annual report of why they have not done so.
3. The FRC undertook an informal assessment of progress in implementing the revised Combined Code in late 2004. A statement on the findings can be found at http://www.frc.org.uk/press/pub0738.html. 
4. Responses to the call for evidence are requested by 14 October 2005 and should be sent to: codereview@frc.org.uk.
5. Press enquiries should be directed to Chris Hodge on tel: 020 7492 2381 or
   e-mail: c.hodge@frc.org.uk.