Investors the key to changes to the Combined Code.

Cometh the downturn, cometh the regulatory review. Now it’s the turn of the Combined Code to be assessed. In its last review in 2007, only modest changes were proposed and implemented last year. Largely the Code won a resounding thumbs up from both issuers and investors. It has been regarded as state of the art. However the latest review emphasises the role that investors should play.

City folks are pointing out that the financial crisis justifies another look. The review of the Code comes against a background where the Walker review is looking banks’ corporate governance, and where the CEO of the FSA has highlighted the need for non-executives to commit more time and improve their technical skills, making them more like full time executives.

What does this mean for the beleaguered IRO?

First, what is the FRC looking at precisely? Aside from relatively obvious area of review, such as how board structures are working, and the support the board receives, the review will focus on the role that institutional investors can and should play.

This rather turns the Code and its purposes on its head. There are hints that revised commitment from leading institutional investors is needed to monitor companies’ application of the Code effectively and to make their views publicly known when they are not happy with a company's response to their concerns.

For many IRO’s, the Code has been the preserve of the company secretary, and the ‘compliance’ aspect has been uppermost in companies’ minds. However, as always, the IRO is the key channel to the investors, and managing how investors view the company and express their concerns cuts to the heart of the day job.

Making your views known to the FRC on what this means for IRO’s will be important.