Revised Code of Corporate Governance

New rules take effect next week for non-executive directors in the UK. Many companies have not fully implemented the recommendations of the Cadbury Commission from 10 years ago, so the new, tougher rules coming out of the Higgs review may be difficult to implement.

Proponents of the action say it will "shine a light into boardrooms, opening up much of how they work to public scrutiny for the first time". Opponents complain that the new rules require companies to either comply or spend too much effort explaining why they chose to not comply.

One positive result of the changes in UK attitudes toward corporate governance is that shareholders of both Barclays and J Sainsbury are now pressing the companies to explain their plans to promote their CEOs to Chairmen. Keeping these two positions separate was one of the Cadbury Commission recommendations 10 years ago and it is a key recommendation of the new code.

More resources on this topic:

• CEOs Are Overpaid
• More Bare Knuckles in the Boardroom
• Congress Fails As Board of Directors