''Review of the role and effectiveness of non-executive directors'' (or the "Higgs review") was a report chaired by Derek Higgs on

corporate governance Corporate governance refers to the mechanisms, processes, practices, and relations by which corporations are controlled and operated by their boards of directors, managers, shareholders, and stakeholders. Definitions "Corporate governance" may ...

commissioned by the UK government, published on 20 January 2003. It reviewed the role and effectiveness of non-executive directors and of the audit committee, aiming at improving and strengthening the existing Combined Code. There was widespread unrest after the scandals in the US, involving

Enron Enron Corporation was an American Energy development, energy, Commodity, commodities, and services company based in Houston, Texas. It was led by Kenneth Lay and developed in 1985 via a merger between Houston Natural Gas and InterNorth, both re ...

WorldCom MCI, Inc. (formerly WorldCom and MCI WorldCom) was a telecommunications company. For a time, it was the second-largest long-distance telephone company in the United States, after AT&T. WorldCom grew largely by acquiring other telecommunicatio ...

, and Tyco. The US opted for legislation under the

Sarbanes–Oxley Act The Sarbanes–Oxley Act of 2002 is a United States federal law that mandates certain practices in financial record keeping and reporting for corporations. The act, , also known as the "Public Company Accounting Reform and Investor Protectio ...

. Higgs strongly backed the existing non-prescriptive approach to corporate governance: "comply or explain". Yet he advocated more provisions with more stringent criteria for the board composition and evaluation of independent directors. He wanted to remove some of the discretion that the Code allowed. Higgs viewed the earlier scandals, which led to the

Cadbury Report The Cadbury Report, titled ''Financial Aspects of Corporate Governance'', is a report issued by "The Committee on the Financial Aspects of Corporate Governance" chaired by Sir Adrian Cadbury, chairman of Cadbury, that sets out recommendations o ...

could have been avoided had a Code been in place. The

Robert Maxwell Ian Robert Maxwell (born Ján Ludvík Hyman Binyamin Hoch; 10 June 1923 – 5 November 1991) was a Czechoslovakia, Czechoslovak-born British media proprietor, politician and fraudster. After escaping the German occupation of Czechoslovakia, ...

debacle could have been avoided in his view because many firms already refused to deal with him, and disclosure of his company's governance practices would have led to more pressure for change. In December 2009, the Financial Reporting Council commissioned the Institute of Chartered Secretaries and Administrators to update the Higgs guidance with the assistance of a Steering Group. In July 2010, ICSA launched draft guidance Improving board effectiveness'as part of this process. The Financial Reporting Council published the final guidance in March 2011, and it is available here: http://www.frc.org.uk/getattachment/c9ce2814-2806-4bca-a179-e390ecbed841/Guidance-on-Board-Effectiveness.aspx

References

External links

* The Higgs report DBER
website
an
pdf

Full text of the combined code 2006

Full text of the combined code 2003
* The Financial Services Authority

Listing Rules The UK Listing Rules (UKLR) are a set of regulations applicable to any company listed on a United Kingdom stock exchange, subject to the oversight of the Financial Conduct Authority (FCA). The UK Listing Rules set out mandatory standards for any c ...

br>online
and i
pdf format
under which there is an obligation to comply with the Combined Code, or explain why it is not complied with, under LR 9.8.6(6). * The

Financial Reporting Council The Financial Reporting Council (FRC) is an independent regulator in the UK and Ireland based in London Wall in the City of London, responsible for regulating auditors, accountants and actuaries, and setting the UK's Corporate Governance and ...

'
website
{{DEFAULTSORT:Review Of The Role And Effectiveness Of Non-Executive Directors Reports of the United Kingdom government 2003 in the United Kingdom United Kingdom company law Reports on finance and business Corporate governance in the United Kingdom 2003 documents

See also

References

External links