Financial Times, 12/11/2017 (subscription required)
The proposed rules, set out in the UK’s revised corporate governance code last week, state for the first time that chairmen should step down from their role after nine years on the board. This includes time spent in previous non-executive director roles. The change would catch out the chairs of 67 listed companies.
The tenure proposal is particularly controversial for individuals in companies who have not yet served nine years in their current role but previously held non-executive director spots that bring total tenure over the limit. The chairman of one of the affected companies agrees that the changes were too harsh, specifically because non-executive directors are not always involved in a daily routine.
Although not mandatory, most listed UK companies comply rather than exercise their ability to explain to shareholders why they are not doing so.
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