The new corporate governance code, which is designed to improve the performance of company boards and the directors that serve on them, presents a huge opportunity for HR to increase its influence.

This is the view of Geoff Armstrong, director general of the Chartered Institute of Personnel and Development, on the final version of the long-awaited code just published by the Financial Reporting Council.

The new code is based on the draft revision of the existing code that Derek Higgs suggested in his government-commissioned report on non-executive directors, published in January, and recommendations made in Sir Richard Smith's report on audit committees.

The code, which will come into effect for reporting years beginning on or after 1 November 2003, requires there to be a more open and rigorous procedure for appointment of directors and a wider pool of candidates.

It calls for formal evaluation of the performance of boards, committees and individual directors, and enhanced induction and professional development of non-executive directors.

Armstrong welcomes changes to the draft code that allow companies more flexibility in how they implement the code, which he believes will improve corporate governance without undermining entrepreneurial behaviour at board level. "This code clarifies the roles and responsibilities of executive directors and non-executive directors in a way that does not set them up in opposing camps," he said.

However, Armstrong is confident the code will still have a significant impact and ensure HR expertise is needed at the highest level. "I believe it will promote diversity and it needs to do so," he said.

"Selection, induction and training of directors will be a much more rigorous process compared to the traditional 'old boys' network'. There will be a more prominent role for HR in identifying the necessary skills and competencies."

Armstrong hopes the call for directors to be selected from a wider pool of candidates will present opportunities for senior HR professionals to take up roles as non-executive directors. He is also optimistic that the increased emphasis on continuous development and performance review for directors will promote a closer link betw