Plans to make company directors face shareholder elections annually could be watered down when new rules governing the way companies operate are announced this week.
The considerable opposition to a yearly election from all corners of the UK corporate world, including BA, Tesco, Sainsbury and some of the biggest pension funds, could force the Financial Reporting Council into a climb-down.
The council's corporate governance committee meets this week to decide if directors should be subject to an annual vote. "Most investors are in favour of the change but the FRC could choose to recommend rather than force this on boards for the moment," said a source. Currently, directors face a vote every three years on a staggered basis.
Re-electing chairmen annually was recommended by Sir David Walker in his report last year on reforming Britain's banks. The overhauling of the so-called Combined Code could also usher in a number of other changes including external reviews of a board's performance.