WEDNESDAY 23 JULY 2003

NEW COMBINED CODE BUILDS ONDISCUSSION WITH BUSINESS, SAYS IoD

The new CombinedCode, published today by the Financial Reporting Council, was welcomed by theInstitute of Directors (IoD) which was also pleased that the process has takeninto consideration the recommendations of the Higgs and Smith reports anddeveloped them in the light of considerable discussion with business.

Commenting on thepublication of the new Combined Code, the IoDs Corporate Governance Executive,Patricia Peter, said:

Both the approach ofthe Code and many of the detailed provisions are in line with what we advocatedwhen the first draft was produced.

The IoD is particularlypleased to see the emphasis placed on the quality of directors and boards asthe key to achieving both high standards of corporate governance and, mostimportantly, superior company performance. Rigour and transparency ofappointment and continuing development and evaluation of both individuals andthe board as a whole are given their due place.

Weare also pleased to see that the position of the smaller listed company hasbeen recognised, with a regime that will not impose boards of unwieldy size onthem.

Therevised Combined Code, as it has emerged from the consultation and draftingprocess, combines the necessary high standards with recognition that companiescan achieve these through somewhat different approaches. The importance placed on flexibility ofimplementation and informed dialogue is to be applauded. For real improvements to be achieved, theseneed to be translated into practice.

MsPeter added:

Aftera shaky start to the consultation, the FRC has done a good job of steering asensible course through the various interest groups. The final product makes clear that all concerned, both boards andshareholders, have a role to play in achieving good corporate governance.

The IoD applauds theemphasis on more training for those joining the board as non-executive andexecutive directors. That is why, in 1999, the IoD launched the CharteredDirector Initiative. Chartered Director - the worlds first independentlyaccredited board-level qualification - further promotes the importance ofdirector development and recognises the importance not just of knowledge andunderstanding, but of board-level experience and good practice.

Ends 23.7.03 No.186

Notes to Editors

1. A copy of the IoD's response to the Higgs Review can bedownloaded at www.iod.com/pressoffice or by contacting the Press Office on

0207451 3264.

2. More information on the IoDs Chartered Director programmecan be found at www.iod.com/chartered

3. The IoD (Institute of Directors) is a non-party politicalindependent organisation with around 55,000 members. In addition to its widerange of business services, the IoD provides an effective voice to representthe interests of its members to government and key opinion-formers. It alsobrings the experience of business leaders to bear on the conduct of publicaffairs.

Contact Points:

Patricia Peter,Corporate Governance Executive, tel.020 7451 3113

Richard Taylor, PressOfficer, tel: 020 7451 3264

mobile and out of hours: 07721 734886

David Marshall,Director of Public Affairs, tel: 020 7451 3263

mobile and outof hours: 0776 4883420

email: press@iod.com

web: www.iod.com