The proportion of FTSE 350 companies fully compliant with the revised Combined Code has dropped by half to 28%, compared to the 58% that were fully compliant with the former Combined Code in 2004, acc

"However," says Simon Lowe, head of Grant Thornton risk management services, "of the 230 companies that do not fully comply (representing 59% of FTSE 100 and 79% of Mid 250) only 12% give no explanation as to why. This clearly shows that the vast majority of FTSE 350 companies embrace the principles of 'comply or explain'. Taking the revised Code seriously must be the most effective way for the UK to avoid the onset of a US-style prescriptive regime."

Although the drop in compliance looks disappointing, Lowe attributes it to companies struggling to implement new changes and says that in fact this year's results represent the strongest to date. Particular areas of improvement relate to the information now given about the roles and responsibilities of various committees and how their performance and that of individual directors is appraised annually.

However, there is ongoing debate about the reluctance of individual non-executive directors to take on the mantle of 'the financial expert'. Over half the companies do not identify the individual(s) deemed to have recent and relevant financial experience and 27% of companies do not even acknowledge that the matter has been considered.