UK Corporate Governance Source Material

December 2007

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  1. The Combined Code (June 2006)

This Combined Code replaces the 2003 Combined Code for financial years beginning on or after 01 November 2006. (See the appendix for historical information relating to the Combined Code.)

  1. Associated Guidance
  • The Smith Guidance on Audit Committees which is taken from the Smith Report.
  • Suggestions for good practice from the Higgs Report relating to non-executive directors.
  1. Turnbull Guidance

The Turnbull Guidance (Internal Control: Revised Guidance for Directors on the Combined Code – October 2005) provides guidance on how to apply the section of the Combined Code dealing with internal controls.

  1. Directors
  • ICSA guidance note on matters reserved for the board (2007)
  • ICSA guidance note on the roles of chairman, chief executive and senior independent director under the Combined Code (September 2004)

  • ICSA guidance note on terms of reference for executive committees (September 2004)
  • ICSA guidance note on due diligence (2003)
  • ICSA guidance note on directors’ share dealings (2003)
  • ICSA guidance note on the induction of directors (2003)
  • ICSA guidance note on directors’ and officers’ insurance (2003)

All the above notes are available at:

  • NAPF guide for independent non-executive directors (“Independent Directors - what investors expect”: 2002)
  • Model Code (August 2007). (Annex 1 to Chapter 9 of the Listing Rules.)
  • Institutional Shareholders Committee (“ISC”); The Role and Duties of Directors – A Statement of Best Practice (August 1993).
  1. Nomination Committee
  • ICSA terms of reference for a nomination committee (2007)
  • Tyson Report (The Tyson Report on the Recruitment and Development of Non-Executive Directors: June 2003)
  1. Remuneration Committee
  • ABI Guidelines on policies and practices (December 2007)
  • ICSA terms of reference for a remuneration committee (2007)
  • ICSA guidance note on principles of executive service contracts (2003)
  • CBI Best Practice Guidelines on Directors’ Contracts and Severance (September 2003) published in response to the DBERR’s (formerly DTI) consultation document on “Rewards for Failure”.
  • ABI and NAPF joint statement setting out best practice on executives’ service contracts and severance (December 2002).
  1. Audit Committee
  • ICSA terms of reference for an audit committee (2007)
  • ICAEW guides for audit committees:
  • working with your auditors
  • company reporting and audit requirements

  • reviewing auditor independence
  • evaluating your auditors
  • Whistleblowing arrangements
  • Monitoring the integrity of financial statements
  • The internal audit function
  • The Power of Three

These guides are to assist non-executives on audit committees understand the proposals in the Smith Report on audit committees and how they should be applied. All the guides can be found at:

  1. Shareholder involvement/voting
  • NAPF Corporate Governance Policy and Voting Guidelines (November 2007)
  • PIRC (Pension Investment Research Consultants Limited) Shareholder Voting Guidelines 2007
  • ICSA Guidance on Part 9, Companies Act 2006 Indirect Investors – Information Rights and Voting (October 2007)
  • ICSA guidance note on corporate representation at general meetings (March 2004)
  • ICSA guidance note on voting at general meetings (December 2003)
  • ISC “The Responsibilities of Institutional Shareholders and Agents – Statement of Principles” (June 2007)
  • ISC Framework on voting disclosure (June 2007)
  • ABI Guidelines on responsible investment disclosure (January 2007)
  • International Corporate Governance Network’s Statement on the responsibilities of institutional investors (February 2004)
  • Investor Relations Society Briefing Paper on Shareholder Activities (January 1999)
  1. AIM Companies
  • NAPF Corporate governance policy and voting guidelines for AIM Companies (March 2007)
  • Corporate Governance Guidelines for AIM companies issued by the Quoted Companies Alliance (February 2007).
  1. Investment Companies
  • AIC: Code of Corporate Governance: a framework of best practice for member companies (May 2007): A Corporate Governance Code issued by the Association of Investment Trust Companies (“AIC”) for boards of AIC member companies in respect of the governance of investment companies.
  • AIC: Corporate Governance Guide for Investment Companies (May 2007): A comprehensive guide on corporate governance which brings together the relevant requirements and recommendations from the Combined Code, the AIC Code of Corporate Governance and the Listing Rules (May 2007)
  • NAPF Corporate governance policy and voting guidelines for Investment Companies (March 2007)
  • AUTIF: Code of Good Practice: institutional investors and corporate governance (January 2001)

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APPENDIX

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  1. The Combined Code (July 2003)

This Combined Code replaced the Combined Code issued by the Hampel Committee in 1998. It was derived from the Higgs and Smith reports (see below). It applied to companies admitted to trading on the London Stock Exchange for financial years beginning prior to 01 November 2006.

  1. Hampel Report

Committee on Corporate Governance – Final Report (January 1998)

  1. Greenbury Report

Directors’ Remuneration Report (July 1995)

  1. Cadbury Report

The Financial Aspects of Corporate Governance: Compliance with the Code of Best Practice (May 1995)

  1. Higgs Report

Review of the role and effectiveness of non-executive directors (January 2003)

  1. Smith Report

Audit Committees: Combined Code Guidance (January 2003)

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This document provides a list of the core UK source material as at 31 December 2007. These are frequently changed by best practice, public statements, further consultations, as well as by EU and other developments.

Source material should always be checked before use to ensure that it is up to date and that none of these changes has occurred.

If you would like further information, please email, ColinLeaver or Jo Weston or your usual contact at Simmons & Simmons.

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