U.K regulator the Financial Reporting Council has proposed a series of changes to its Combined Code on Corporate Governance. The new version of the code released for consultation is aimed at incorporating lessons learned during the financial crisis.

Among the key changes, the FRC wants shareholders to elect the board chairman—or the whole board—annually and to make boards commission an independent review of their performance at least every three years.

The FRC has also put forward a series of new principles on the chairman’s leadership role and the skills and independence of non-executive directors. Such directors should spend more time on the job, the proposed new code says.

There are new principles covering the board’s responsibility for and handling of risk, and proposals to emphasize that performance-related pay should be aligned to the long-term interests of the company and its policy on risk.

“The principal lesson of the financial crisis is that those on boards must think deeply about their individual and collective roles and responsibilities,” said Sir Christopher Hogg, FRC chairman. “The code is not a set of rules to be applied unthinkingly. It demands that boards seriously and self-critically assess their performance and openly explain themselves to shareholders.”

Hogg said the FRC review that led to the proposed new code, “has not found evidence of serious failings in the governance of British business outside the banking sector.”

The new code is subject to consultation until March 5, 2010. It will then apply to any companies with a premium U.K. listing from June 29.

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