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Companies: forget re-elections
Companies are being urged to ignore guidelines that require them to annually re-elect board members. Three of the UK’s biggest investors – Hermes, Railpen and the Universities Superannuation Scheme – have written to 700 companies urging them not to comply. In the letter, they warn that annual election of directors can undermine collective decision making and leave companies rudderless if whole boards are thrown out at once. The new Financial Reporting Council (FRC) code of practice is not compulsory, with companies being told they can “comply or explain”.