Skip to content

18 May, 2025

  • Saved Articles
  • My Account
  • Subscribe
  • Log In
  • Log Out

Board Agenda

  • Governance
  • Strategy
  • Risk
  • Ethics
  • News
  • Insight
    • Categories

      • View all
      • Governance
      • Strategy
      • Risk
      • Ethics
      • Board Expertise
      • finance
      • Technology
    • leadership on AI

      How to get ahead on AI leadership

      The question isn’t how AI will change business—it’s whether leaders can harness it to drive...

    • canada tariffs

      Corporate governance to the fore in Canada

      As Canada responds to the tariff conditions set by the US, companies need to take...

    • AI will transform

      4 ways AI will transform board dynamics

      Opportunities and challenges are arising from the integration of artificial intelligence into corporate governance.

  • Comment
      • View all
    • leadership on AI

      How to get ahead on AI leadership

      The question isn’t how AI will change business—it’s whether leaders can harness it to drive...

    • canada tariffs Corporate governance to the fore in Canada

      As Canada responds to the tariff conditions set by the US, companies need to take...

    • meritocracy Fairness makes for meritocracy

      Favouring actions over persuasion, boards can take small yet extremely effective steps to improve diversity,...

  • Interviews
      • View All Interviews
      • Podcasts
      • Webinars
    • financial sanctions Tariffs chaos drives boardroom focus on resilience

      Business leaders will prioritise the resilience of their organisations in the face of economic upheaval...

    • ai boards Corporate world has a ‘huge appetite’ for artificial intelligence

      AI could change boardrooms to the extent that directors’ duties would change too, a panel...

    • EU non-financial reporting reforms are an ‘opportunity’

      Firms can take advantage of the delayed implementation of CSRD and CSDDD to take stock...

  • Board Careers
  • Resource Centre
      • White Paper Downloads
      • Book Reviews
      • Board Advisory & Corporate Services
    • Director Reference Guide: Fostering the board-CEO relationship

      This Board Agenda Director Reference Guide on fostering the board-CEO relationship provides practical advice to...

    • Forvis Mazars AI 2025

      Performance Pulse: Are UK businesses prepared for AI?

      Forvis Mazars measured the AI preparedness of more than 300 UK businesses: 97% say they're...

    • Parker review cover

      Improving the Ethnic Diversity of UK Business, Parker Review update 2025

      The 2025 Parker Review update report, supported by EY. Over the past year, significant progress...

  • Events
  • Search by topic
    • Governance
    • Strategy
    • Risk
    • Ethics
    • Regulation
    • ESG
    • Investor Relations
    • Careers
    • Board Expertise
    • finance
    • Technology

Flexibility on offer for chairman terms in new governance code

by Gavin Hinks on July 12, 2018

A new UK governance code to be published on Monday will offer flexibility to allow some chairmen to serve for longer than nine years.

David Styles

David Styles, FRC

Company chairmen are to be granted flexibility in the UK’s new corporate governance code to be considered independent beyond nine-year terms, according to a senior figure behind the new document.

David Styles, director of corporate governance at the Financial Reporting Council, told a conference this week that the move had been made to encourage gender diversity in board leadership.

Styles said the new code would offer the opportunity for chairs to be considered independent after more than nine years if they were an “internal promotion” and had served part of their time on the board in another role.

The new code is expected to be published on Monday. Earlier this year the FRC released a draft governance code for consultation, with elements on non-executive directors that controversially suggested a chairman could not be considered independent beyond a nine-year term.

“Effective refreshment of the chair, particularly if the chair chairs the nominations committee, will lead to effective refreshment of the board.”

–David Styles, FRC

Styles told the annual conference of ICSA: The Governance Institute that the FRC had encountered concern during consultation that the “nine-year” guideline would limit the terms of chairs who may have joined as a non-executive before taking on leadership of the board.

In December, the Financial Times ran a story saying the nine-year limit would affect the chairmen of 67 companies, including 19 in the FTSE 100 index.

Styles said the FRC “came across data that suggests it is more likely that a woman will be made chair from an internal appointment rather than a direct hire from outside.

“In terms of promotion of diversity, that’s why we have set out particular circumstances where … we consider it OK for there to be flexibility to breach a time limit for a chair’s term.”

Styles would not offer detail on what the new nine-year code clauses would say, but he reiterated the FRC’s belief that chairmen should have their time in charge constrained.

“We do think it’s important that the chair be considered independent upon appointment.”

He added: “But we also think that effective refreshment of the chair should take place. And effective refreshment of the chair, particularly if the chair chairs the nominations committee, will lead to effective refreshment of the board.”

Remco reform

Styles also flagged changes to the role of remuneration committees. He said many observers feared the consultation draft of the new code gave committees “executive” responsibility over the pay of employees as well as directors and senior managers.

“What we’ve done is make it clear that we are not expecting the remuneration committee to have executive authority over these things, but they have to have a full understanding of what they are.”

Changes to the role of the remuneration committee stem from an attempt to give boards a view of how workers are affected by executive pay deals.

Styles said the FRC also came across concern about provision in the code for worker engagement. The draft said companies would “normally” use one of three methods: a worker on the board, a workers’ panel reporting to the board, or a NED representing worker views.

Styles said the final draft of the code had been amended to recognise other forms of worker engagement, including trade unions.

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • Mail

Related Posts

  • Directors' social networks reduce risk of corporate failure
    May 4, 2022

    Study says failure is less likely when a board’s “social network” is large, its managerial network small and its executive pay relatively low.

  • Law experts defend Nasdaq in board diversity battle
    September 27, 2022
    Nasdaq diversity

    US academics point out that the proposed new requirements relate only to reporting and disclosure, not quotas.

  • Corporate disclosures affect strategic ability of boards
    August 29, 2023
    Audit ESG reporting

    Meeting reporting responsibilities means boards are left with less time for strategic discussions, reveals annual survey.

  • Parker Review sends ethnic diversity challenge to FTSE 350
    March 15, 2023
    Parker review

    This year’s report shows that, although significant progress has been made, many companies have increased diversity through NED appointments.

For thoughtful journalism, expert insights on corporate governance and an extensive library of reports, guides and tools to help boards and directors navigate the complexities of their roles, subscribe to Board Agenda

board leadership, corporate governance, David Styles, FRC, gender diversity, ICSA

Search


Follow Us

Boardroom Intelligence

Stay in the know and register for free to receive our essential Boardroom Intelligence Briefing featuring:

  • Top governance headlines, expert opinion & boardroom insights, exclusive whitepapers & strategy guides, delivered to your inbox every week – Sign up here

 

Most Popular

Featured Resources

wef global risks 2025

The Global Risks Report 2025

The 20th edition of the Global Risks Report reveals an increasingly fractured global...
Supply chain management cover

Strategic Oversight in Supply Chain Management: A Guide for Corporate Boards 2025

Supply chains have become complex, interdependent and opaque and—according to research...
OB-Cyber-Security

Cyber Security: What Boards Need to Know

Maintaining firewalls, protecting servers and filtering malicious emails rarely make...

The IA’S Principles Of Remuneration 2024 2025

This guidance from the Investment Association is aimed at assisting remuneration...
Diligent 2024 leadership tech cover

Leadership, decision-making & the role of technology: Business survey 2024

This research report by Board Agenda and Diligent sheds light on how board directors...

Director Reference Guide: Navigating Conflict in the Boardroom

The 'Director Reference Guide' on navigating conflict in the boardroom provides practical...
Nasdaq 2024 governance report cover

Nasdaq 2024 Global Governance Pulse

This Nasdaq survey gathered data from more than 870 board members, executives, and...

Becoming a non-executive director (4th edition)

Board composition is the subject of much debate, while the role of the non-executive...
art & science brainloop new cover

The Art & Science of Creating an Effective Board

Boards are coming under more scrutiny and pressure than ever before from regulators,...
SAA First time NED guide

First Time Guide for Non-Executive Directors

The role of the non-executive director has never been more vital: to advise, support,...

Register Free

By registering you will be able to access one premium article each month, selected partner newsletters and content, plus updates about our events and podcasts. Register


  • Editors & Contributors
  • Editorial Advisory Board
  • Board Advisory & Corporate Services
  • Media Marketing Solutions
  • Contact Us
  • About Us
  • Board Director Network
  • Terms & Conditions
  • Privacy Policy
  • Cookies
|

Copyright © 2025 Questor Media Group Ltd.

  • Terms & Conditions
  • Privacy Policy
  • Sitemap