Three-quarters of the UK's listed companies are failing to comply fully with the revised Combined Code on corporate governance. According to a report by Pensions Investment Research Consultants (Pirc), there needs to be a significant change in attitude to the code--particularly its "comply or explain" principle.
Pirc's review of 444 companies on the FTSE All-Share Index found that some were merely paying lip-service to the code, while others were not giving convincing reasons for failing to comply with its provisions.
"You'll still get the sort of scenario where a company insists that all of its directors are independent despite that fact that the chief executive's brother is a major shareholder," said Pirc's David Somerlinck. He stressed that the onus was on investors to ensure that firms would genuinely move towards greater transparency and independence.
"Shareholders need to be vigilant and make their feelings known particularly when...