New code paves way for added financial PR input

The London Stock Exchange’s new corporate governance code could mean an increased role for PR in controlling the release of information on issues like directors’ pay and company board structure, according to financial PR experts.

The London Stock Exchange’s new corporate governance code could

mean an increased role for PR in controlling the release of information

on issues like directors’ pay and company board structure, according to

financial PR experts.



In-house PR teams and agencies are predicting that they will have more

input into this process as the contents of company reports come under

greater scrutiny.



The code, which draws together the recommendations of the Cadbury and

Greenbury reports, will come into effect as early as January for some

companies. Listed companies will be obliged to report on how they are

complying with the code or provide explanations for how they are

not.



It is in providing these explanations that PR advisers could have an

influential role to play.



The code urges clearer reporting, both to shareholders and the Exchange,

of delicate issues such as directors’ pay and board structure. It also

underlines that the chief executive and chairman roles should be

separate.



Charles Watson, a consultant at Financial Dynamics, said: ’It is best

for the in-house team or agency to be involved right at the outset,

talking with those on the remuneration committee who form policy.’



Alex Mackey, director of communications at listed retail group

Debenhams, said: ’The biggest two areas are building relationships with

the remuneration committee and audit committee. Full disclosure of

findings of these committees will become far more prevalent.’



The code is not currently backed by wider legal powers but companies

could face public censure or even expulsion from the Stock Exchange if

they fail to comply.



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