The Financial Reporting Council welcomes Sir David Walker’s report on the governance of banks and other financial institutions which was published earlier today.

Commenting on the report Sir Christopher Hogg, Chairman of the FRC, said:

“The Combined Code on Corporate Governance and its related guidance provide a framework for all listed companies. The FRC is undertaking its own review of the Code, and as part of that process proposes to adopt the recommendations in the Walker Report that it considers after consultation are appropriate for all companies.”

“As Sir David notes in his report, banks and other major financial institutions differ from the majority of other listed companies, notably in the systemic nature of their activities and the complexity of their operations. Some of his recommendations are therefore specific to the financial sector and will be taken forward by the Government and the FSA.”

The FRC will issue a report on its own review of the impact and effectiveness of the Combined Code in early December, together with a draft revised Code which will be subject to consultation. Subject to the outcome of that consultation, and the necessary changes to the Listing Rules, the updated Code will apply to all listed companies with a Premium Listing for financial years beginning on or after 29 June 2010.

In addition the Government has asked the FRC to take responsibility for a stewardship code for institutional investors as recommended by Sir David Walker. The FRC has agreed to do so, subject to consultation designed to ensure it can be operated effectively.

1. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting confidence in corporate governance, including through excellent corporate reporting.
2. The Combined Code on Corporate Governance sets out standards of good practice including on board composition and development, remuneration, accountability and audit and relations with shareholders. All UK incorporated companies with a primary listing are required under the Listing Rules to report on how they have applied the Combined Code in their annual report and accounts, and either to confirm that they have complied with the Code's provisions or - where they have not - to provide an explanation (known as “comply or explain”). From April 2010 this requirement will apply to all companies with a Premium Listing, regardless of their country of incorporation.
3. The FRC announced in March 2009 the latest in its regular series of reviews of the impact and effectiveness of the Combined Code, and issued a progress report in July. Copies of the review documents and consultation responses can be found at: http://www.frc.org.uk/corporate/reviewCombined.cfm.
4. Media enquiries should be directed to Chris Hodge, Corporate Governance Unit, telephone 020 7492 2381, email: c.hodge@frc.org.uk.