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Press Release

For immediate release: Monday 24th February 2003


In written evidence to the Trade and Industry Select Committee, the IMA has lent its support to the recommendations of the Higgs Review.  

Many of the recommendations in the IMA’s original submission to the Review have been reflected in the final report.   The IMA particularly welcomes the proposals to enhance the board’s role and clarify the roles of its members.  

In particular, it supports the concept of the “senior independent director” as this will strengthen companies’ relationships and interaction with institutional investors.   The existence of the senior independent director as a complementary channel alongside the Chairman, executives and other non-executives will reassure investors that they are able to communicate effectively with the whole board.    

The IMA also welcomes Higgs’ endorsement of the Institutional Shareholders’ Committee’s Statement of Principles on Shareholder Activism.  This is the first comprehensive statement of best practice on institutional investors’ responsibilities to secure shareholder value through consistent monitoring of the companies in which they invest. 

Richard Saunders, Chief Executive of the IMA, said:

 “Derek Higgs’ proposals to update the Combined Code will enhance the board’s role and improve non-executives’ relationship with shareholders.  We welcome particularly the proposal to appoint a senior independent director.  The criticisms in some quarters of this recommendation are grossly overdone.  It will significantly improve the ability of investors to engage actively and constructively with the companies in which they invest.”

The IMA’s evidence to the Select Committee is attached.

For further information, please contact: 
Richard Saunders, Chief Executive, IMA, 020 7831 0898
Liz Murrall, Senior Adviser-Regulation, IMA, 020 7831 0898
Clare Arber, Head of Communications, IMA, 020 7831 0898

65 Kingsway London WC2B 6TD 
Tel: +44 (0) 20 7831 0898 Fax:+44 (0) 20 7831 9975 
Investment Management Association is a company limited by guarantee registered in England and Wales Registered number 4343737.  Registered office as above.

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