The Financial Reporting Council has announced changes to the Combined Code which will apply to accounting periods for public companies listed on the London Stock Exchange beginning on or after 29 June 2008. In practice this means most companies will begin to apply the new rules in 2009.
What are the changes?
- Removal of the restriction on an individual chairing more than one FTSE 100 company.
- Listed companies below the FTSE 350, may allow the company chairman to be a member of, but not to chair, the audit committee provided they were considered independent on appointment.
Schedule C to the Code (which summarises the disclosure requirements in the Listing Rules and the Code) will also be updated to include the new FSA Corporate Governance Rules (which incorporate EU requirements on audit committees and corporate governance statements).
What should companies do?
- Notify directors of these changes.
- Listed companies below the FTSE 350 should consider whether the chairman should be invited to attend the audit committee.
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