FRC plans boardroom code shake-up

Directors could face annual re-election under new plans to make boardrooms more accountable in the wake of the banking crisis.

The Financial Reporting Council’s (FRC’s) new boardroom code, to be published on Friday, is being billed as a comprehensive overhaul of the way companies are managed, according to the Guardian.

The code will also press company chairmen to think about improving the representation of women in the boardroom, although it will stop short of setting a binding quota. Only 10% of directors in Britain's top 100 companies are women, and 25 of the top companies have no women on their boards at all.

The new regulations are in response to Sir David Walker’s review of corporate governance in the financial services sector undertaken last year, which urged shareholders to get more involved with the board, and asked board members to improve their skills.

While investors have been broadly supportive of the idea of putting directors to the vote each year, rather than once every three years, some businesses are less enthusiastic, and opponents have included British Airways, Tesco and Sainsbury.

The code, which the FRC is due to rubberstamp tomorrow, could bring in a number of other changes including external reviews of a board's performance. The FRC declined to comment on theGuardianreport.