ICSA welcomes guidance on board effectiveness

The Institute of Chartered Secretaries and Administrators (ICSA) welcomes the Financial Reporting Council’s publication today of ‘Guidance on Board Effectiveness’, the purpose of which is to help boards of UK companies avoid some of the problems that contributed to significant value destruction during the recent financial crisis. ICSA played a leading role in formulating ‘Guidance on Board Effectiveness’, having been commissioned by the Financial Reporting Council (FRC) in December 2009 to develop the guidance. The FRC’s intention is that the guidance should be consulted by boards when implementing the UK Corporate Governance Code. It contains practical suggestions on matters such as the leadership role of the Chairman and decision-making by boards. ‘Guidance on Board Effectiveness’ replaces the Higgs guidance and is one of four pieces of FRC guidance associated with the UK Corporate Governance Code.

The guidance was drafted by ICSA with the help of a Steering Group chaired by Sir John Egan, recent Chair of Severn Trent Plc, and follows extensive consultations with chairmen, directors and company secretaries from many of the UK’s leading companies, as well as investors and professional advisers to boards.

Sir John Egan, Chair of the Steering Group, said:

‘Today’s publication concerns board effectiveness and is the result of a year’s consultation and hard work. It is hoped that this guidance will help boards deliver good leadership and make well-informed and high quality decisions’

David Wilson, ICSA’s Chief Executive added:

‘ICSA is delighted to have been commissioned by the FRC to undertake this important project, and we anticipate the guidance will be of great value to everyone with an interest in effective and well run boards. This corporate governance guidance focuses on behaviours and is designed to help boards prevent future cases of corporate collapse’

Members of the Steering Group, including Sir John Egan, will discuss the guidance at ICSA’s Corporate Governance Conference on 16 March

The guidance can be downloaded here