Companies failing to embrace corporate governance reforms

Some companies have failed to embrace the spirit of the revised code on corporate governance and simply “wish it will go away”, according to the creator of the reforms.

Making a rare public comment on the issue, Derek Higgs told a conference in the Netherlands yesterday that a minority of companies were “going through the motions”.

In comments reported by the Financial Times, he added: “That is cynical and disappointing, but true.” He did not name specific companies.

Higgs was commissioned by the Government to review the role of non-executive directors. His recommendations, incorporated into the revised governance Code, apply to reporting years beginning after 1 November 2003.

Some business lobby groups have criticised the new Code for creating a ‘box-ticking’ mentality among directors and shareholders that has resulted in an unproductive focus on compliance, at the expense of business performance.

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