Walker Review proposals

A Review of Corporate Governance in UK Banks and Other Financial Industry Entities

Board size, composition and qualification

1) Each non-executive director should receive personalised training and development, which is reviewed annually.

2) The board should provide support for non-executive directors on any matters additional to the normal board process.

3) Non-executive directors on a major bank board should commit to a minimum of 30 days.

4) The FSA should give closer scrutiny to the balance of the board in terms of risk strategy.

5) The regulator's interview process for non-executive directors should involve questioning and assessment by senior advisers with relevant industry experience.

Functioning of the board

6) Non-executive directors should be ready, able and encouraged to challenge strategy proposals.

7) The chairman should commit no less than two thirds of their time to the business.

8) The chairman should have relevant industry experience and a track record of successful leadership.

9) The chairman should encourage and expect informed discussion.

10) The chairman should be proposed for election on an annual basis.

11) The senior independent director should serve as a sounding board for the chairman and a trusted intermediary for non-executive directors.

12) The board should undertake a formal and rigorous evaluation of its performance with external facilitation of the process every second or third year.

13) A statement of the evaluation should provide high level information to assist shareholders' understanding.

The role of institutional shareholders

14) Boards should ensure they are made aware of any material changes in the share register.

15) The FSA should be ready to contact major selling shareholders to understand their motivation.

16) The remit of the financial reporting council should be extended to cover the development of best practice principles in stewardship by institutional investors.

17) Present best practice "Statement of Principles - the Responsibilities of Institutional Shareholders and Agents" should be ratified by the FRC.

18) The Institutional Shareholders Committee should review their continuing aptness on a yearly basis.

19) Fund managers should signify on their websites their commitment to the Principles of Stewardship.

20) The FSA should encourage commitment to the Principles of Stewardship.

21) A Memorandum of Understanding should be prepared to establish an agreed approach to any issues such as conflicts of interest.

22) Voting powers should be exercised and voting records and policies publicised.

Governance of risk

23) A board risk committee separate from the audit committee should be established.