The collapse of Enron and Worldcom in 2002 triggered a host of new guidelines for corporate governance, which began in the US with the Sarbanes-Oxley Act.

In the UK, the Secretary of State for Trade and Industry, Patricia Hewitt and the Chancellor, Gordon Brown, appointed Derek Higgs, a prominent businessman, adviser and member of the Financial Reporting Council, to lead an independent review into the role and effectiveness of non-executive directors.

The review assessed:

• The population of non-executive directors in the UK - who they are, how they are appointed and how they could be drawn from a wider pool of talent
• The independence and effectiveness of non-executives
• Relationships between non-executives and institutional investors;
  AND
• What could be done to strengthen the quality, independence and effectiveness of UK non-executive directors

The Higgs Report was published in January 2003 and its key recommendations were incorporated into a new Combined Code on Corporate Governance published by the Financial Reporting Council in July 2003.