True, the Code has more to do with best practice than it does with prescription, but if you thumb through the document you’re left with the impression that even though it chimes with Sir Win’s utopian vision, it’s a little woolly for the most part – although that might have something to do with its constant recourse to the term “sustainable”, another modern buzzword, and one so overworked that it has essentially been rendered meaningless.
Semantics aside, there are some pleasing elements. We’ve seen a positive response to the outline position on remuneration schemes, whereby director incentives should be made to align with long-term shareholder interests by ensuring that share awards should be released for sale on a phased basis and be subject to a total vesting period of five years or more. One of the many galling issues surrounding the collapse of Carillion was that its former finance director hived off £776,000-worth of shares after stepping down from the board, less than a year before the construction group went belly up. The FRC would obviously be keen to avoid a repeat, but none of this is mandatory; there’s no compulsion, so whether it will be widely adopted is impossible to gauge.