The Boardroom Blog

FTSE 350 governance - job done?

Tuesday, January 12, 2010 | Posted by: Grant Thornton
Categories: Governance | Tags: Corporate Governance Review, Grant Thornton, Corporate Governance, FTSE 350, compliance, Simon Lowe, governance, Walker

The results are in for the 2009 Corporate Governance Review - is it job done for the FTSE 350?

- Companies comply with, on average, 91% of the Code’s provisions
- 68% of those who choose ‘explain’ now give more informed disclosure to support their non-compliance
- Of those who ‘explain’, 75% are compliant with all but one or two Code provisions
- 66% of the FTSE 350 produce a separate corporate responsibility report

Perhaps not….

- 47% of companies claim compliance with the Code, but only 29% of these companies provide the disclosures to support their statement
- 80 companies failed to achieve the required balance of independent NEDs
- Only 15% of companies use an external evaluator to assess their board effectiveness
- Of over 3,200 risks disclosed, less than 3% relate to environmental
- Only 17 companies obtained independent assurance over their non-financial KPIs

Moving beyond compliance

The shockwave caused by the banking crisis has brought governance into sharper focus. The recent Walker and Combined Code Reviews, rather than introducing more legislation, have focused on improving the quality of corporate governance among all companies. Given that the FTSE 350 now complies with the majority of the Code’s provisions, maybe it is time to recalibrate the benchmark, focus on quality of application and disclosure, and move corporate governance to the next level.

The eighth Grant Thornton FTSE 350 Corporate Governance Review is released this month. The Review is based on eight years’ worth of unique data that has been used by both the FRC and the Walker Secretariat to support their findings.

To find out more or to ensure you receive a hard copy, contact:
Simon Lowe - Lead partner, Business Risk Services
T +44 20 7728 2451
E simon.j.lowe@gtuk.com