Remuneration Consultants Group launches consultation for review of Code of Conduct
The Remuneration Consultants Group (RCG), the body established by the industry to develop a voluntary Code of Conduct for executive remuneration consultants, has announced the first formal review of the Code.
The Code of Conduct is intended to make it easier for clients to make informed and well-constructed decisions around the way in which they work with consultants and the nature of the work they require them to do.
Feedback and comments are invited on “the functioning of the Code and its fundamental principles from a wide range of interested parties”. These will include “remuneration committees of UK FTSE All-Share companies, institutional shareholders and other stakeholders of UK companies, trade associations, corporate governance experts and individuals with an interest in corporate governance issues.”
Voluntary Code of Conduct
The Code was developed over a six-month period in 2009 in consultation with advisers and investors. It is relevant for both the financial and non-financial listed sectors. RCG says: “The Code was initiated in recognition of the need to provide greater clarity around the role of executive remuneration consultants and to ensure that high standards are maintained. Much of the Code clarifies current best practice and it outlines new steps to increase transparency and minimise and manage potential conflicts of interest.”
Download the Code at www.remunerationconsultantsgroup.com/?P=DOWNLOADS.
A final word
“Setting executive pay and getting the balance right to incentivise key talent is a difficult task for remuneration committees. Remuneration consultants have an important role to play in helping committees to make well-informed decisions and the purpose of the Code of Conduct is to ensure that the highest professional standards are achieved. We are looking forward to hearing views and feedback on the existing Code from a wide stakeholder community as part of our consultation process.” - Dr Martin Read, Independent Chairman of the RCG.
Want to know more?
Comments are invited by 31 August 2011 via the RCG web site, after which the RCG will consider its response, propose changes and the formal review of the code will be completed towards the end of 2011. It is the aim of the RCG to review the code every two years.
The Remuneration Consultants Group represents “the overwhelming majority of executive remuneration consultancy firms advising UK listed companies”. The Group was formed in 2009 with, as its aim, the “development of a voluntary Code of Conduct that clearly sets out the role of executive remuneration consultants and the professional standards by which they advise their clients, which, for the most part, are Remuneration Committees.”
Membership of the Remuneration Consultants Group is open to “any consulting firm, or individual acting as a sole trader, named in the (or able to demonstrate that it will be named in the next published) Directors’ Remuneration Report as advising the Remuneration Committee of at least one FTSE 350 company.” For more information visit www.remunerationconsultantsgroup.com.