All listed companies could be required to conform to tighter corporate governance rules, following a review of the Combined Code by the financial watchdog. The Financial Reporting Council has said companies may have to 'apply or explain' any non-conformity to the code of boardroom behaviour, following recommendations made in the Walker review earlier this month. That outlined changes to guidelines on banking and governance, but highlighted that this could be applied to all listed companies eventually. Sir Christopher Hogg, chairman of the FRC, said that the council's 'comply or explain' mechanism was preferred over 'greater prescription'. 'There has been a lot of support for the Combined Code,' he said. 'The two main themes to emerge from our review to date are the importance of getting the proper challenge in the boardroom through picking the right people and maximising their contribution to the board's performance, and the need for better engagement between boards and investors.' But some in the accountancy sector are worried about the recommendations laid out by the Walker review in relation to non-execs. If the scope of the code was widened to all listed companies, an increased need for non-execs would be met by a very limited supply. Matthew Fell, director of company affairs for the Confederation of British Industry, said: 'The FRC is right to focus on getting a suitable mix of people on a company's board so that they can constructively guide and challenge management. 'However, the suggestion that recommendations from the Walker review of governance in the banking industry might be applied to companies more broadly needs to be considered very carefully it would be a mistake to assume that changes proposed for the banks would be good or necessary for all companies,' he added. A final report will be issued by the FRC before the end of the year.