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ACCA is pleased to comment on this exposure draft which was discussed at our last Technical Corporate Governance and Risk Management Committee meeting. I am pleased to say that the Committee welcomed the paper. We strongly support your objective of having a better balance between the performance and conformance aspects of corporate governance; there is not enough emphasis presently on performance. The Committee also welcomed the attention given to stakeholders although we recognise that there is not yet a broad consensus on how governing bodies should pay attention to the rights, wishes and needs of different stakeholders.

We have some minor comments of detail:

E.2: We suggest the word ‘involved’ in the 4th line should be changed to ‘directly responsible’ as, in our view, non executive members can be involved in operations.

E.6: We are not sure that a governing body is always entirely ‘responsible for ensuring the appropriate mix of its members’. For example, members of UK listed companies elect and remove members and in the public sector governing body members are often appointed by a separate public sector individual or body.

L: We suggest there is a more important principle than ‘The governing body should ensure that reasonable demands from stakeholders for information are met on a timely basis, and that the information provided is relevant, understandable, and reliable’. The draft has not really addressed how governing bodies should account for their stewardship or how they can be held to account. We suggest a different principle: ‘governing bodies should account to their stakeholders for how they carry out their stewardship role and stakeholders should be able to hold governing bodies to account’.

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