CGI publishes updated board evaluation Code of Practice and guidance

Following an independent review, the Chartered Governance Institute (CGI) has published updated versions of its:

• Principles of Good Practice for listed companies using external board reviewers, which discuss how companies should engage with external reviewers to maximise the benefit of this external appointment;
• Guidance for listed companies on reporting on board performance reviews, which considers the disclosures required under the UK Corporate Governance Code in relation to board evaluations and seeks to help companies balance the desire of investors for transparency on these reviews and the need to maintain confidentiality; and
• Code of Practice for board reviewers, which sets out principles, with accompanying guidance, to which providers of independent reviews to FTSE 350 companies must commit in order to become a signatory to the Code of Practice.

The documents were first published in 2021 by the CGI (under its previous name, the Institute of Chartered Secretaries and Administrators or ICSA), as part of its final report on the effectiveness of independent board evaluation (see our blog post here).

Changes made in this second edition of the Code of Practice include enhancing the guidance on dealing with potential conflicts of interest between the external reviewer and members of the board.

The Financial Reporting Council’s ongoing consultation on the UK Corporate Governance Code includes a proposal to adopt the CGI’s guidance on reporting on board performance reviews (see our briefing for further details).