Corporate Governance Codes – Summary Table

Code Year Focus Areas Key Recommendations

◾ Majority of non-executive directors (NEDs)
Board structure, should be independent ◾ CEO & Chairman roles
Cadbury Report 1992 financial reporting, and must be separate ◾ Audit committees should be
accountability made up of independent directors ◾ Emphasized
financial transparency
◾ Introduced Remuneration Committees (made up
Executive of NEDs) ◾ CEO pay should be linked to
Greenbury
1995 compensation, performance ◾ Shareholders should be informed
Report
shareholder rights about director pay ◾ Recommended greater
disclosure on executive pay
◾ Advocated principles-based governance instead
Principles-based of rigid rules ◾ Encouraged self-regulation rather
Hampel Report 1998 governance, board than excessive legislation ◾ Favored greater
effectiveness shareholder involvement ◾ Stressed board
responsibility over governance
◾ Boards must ensure strong internal control
Internal controls, risk systems ◾ Companies must assess & report risks in
Turnbull Report 1999 management, annual reports ◾ Encouraged continuous
corporate governance improvement in risk management ◾ Integrated risk
assessment into business strategy
 Code Year Focus Areas Key Recommendations
◾ Boards must disclose NED attendance at
meetings ◾ Executive directors cannot hold too
Non-Executive Directors
Higgs Review 2003 many NED roles elsewhere ◾ Boards must have a
(NEDs), board diversity
mix of skills, experience, and diversity ◾
Strengthened board evaluation processes
◾ Strengthened audit committees ◾ Emphasized
Audit committees,
independent oversight of financial reports ◾
Smith Review 2003 financial reporting
Ensured shareholders trust financial statements ◾
integrity
Recommended clearer reporting on audit processes
◾ Merged Cadbury, Greenbury, Hampel, Higgs, and
1998, Corporate governance
Smith Reports ◾ Covered board composition,
2003, framework, board
Combined Code independent NEDs, and risk management ◾
2006, structure, risk
Updated several times to improve governance ◾
2008 management
Stressed accountability and transparency
◾ Boards must understand & control financial risks
Banking governance,
◾ Banks must have stronger risk management
risk oversight,
Walker Review 2009 frameworks ◾ Introduced the Stewardship Code for
shareholder
investor engagement ◾ Strengthened board-level
engagement
risk committees
 Code Year Focus Areas Key Recommendations
◾ Required annual re-election for FTSE 350
UK Corporate Corporate governance directors ◾ Boards must explain business risks &
Governance 2010 principles, board strategy ◾ Executive pay must align with long-term
Code leadership success ◾ Encouraged stronger board leadership
and accountability
◾ Encouraged institutional investors to actively
Shareholder engage with companies ◾ Required transparent
UK Stewardship
2010 engagement, investor voting & investment policies ◾ Strengthened
Code
responsibility shareholder influence on governance ◾ Promoted
long-term value creation
◾ FTSE 100 companies must aim for at least 25%
Gender diversity, board female directors ◾ Companies should report gender
Davies Report 2011
composition diversity annually ◾ Encouraged inclusive
recruitment policies
◾ CEOs & CFOs must certify financial statements ◾
US corporate Created PCAOB (Public Company Accounting
Sarbanes-Oxley
2002 accountability, financial Oversight Board) ◾ Restricted auditors from
Act (SOX)
fraud prevention consulting for the same firms they audit ◾
Increased penalties for corporate fraud
 Code Year Focus Areas Key Recommendations
◾ Introduced "Say on Pay" (shareholders vote on
US financial regulations, CEO salaries) ◾ Banks must hold more capital to
Dodd-Frank Act 2010 Wall Street reform, risk prevent bailouts ◾ Increased transparency &
management accountability for financial institutions ◾ Restricted
excessive risk-taking by banks
◾ Set international guidelines for corporate
International corporate governance ◾ Covered shareholder rights,
1999,
OECD Principles governance best transparency, and board duties ◾ Used as a
2004
practices reference for many national governance codes ◾
Emphasized ethical business conduct
◾ Created global banking governance rules ◾
Banking regulations, Stressed risk management & independent bank
Basel 2006,
risk management, boards ◾ Strengthened financial stability in global
Committee 2010
financial stability markets ◾ Recommended better capital adequacy
requirements for banks
◾ Introduced stronger shareholder rights &
EU Corporate European shareholder independent boards ◾ Focused on internal controls
2001-
Governance rights, corporate & risk management ◾ Aimed to harmonize
2011
Framework transparency governance rules across the EU ◾ Strengthened
financial reporting standards