UK - Only 19% of the UK's top companies meet investors' highest corporate governance expectations, according to the National Association of Pension Funds (NAPF).
In a report charting the rates of compliance with the Financial services Authority’s (FSA) Combined Code, the NAPF’s Voting Issues Service (VIS) found that nearly half (49%) of the UK’s top 400 companies failed to meet the recommendation that only independent non-executive directors should set directors’ pay levels.
Also according to the report - entitled ‘Governance 2001 - A report on Combined Code compliance’ - investors also expect executive directors’ notice periods not to exceed 12 months. This is a target that over 40% of companies have yet to reach.
However, overall standards are improving, according to the NAPF with compliance rates exceeding 80% in many cases.
NAPF VIS manager, Chris Baldry, said: “Examples of failure and mismanagement remain all too frequent.
“By publishing this report, we can help shareholders and companies alike to identify areas of weakness, and to compare this report’s findings with their own experiences of individual companies.”
The VIS includes investment managers, pension funds and company secretaries among its members.
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