The UK financial watchdog is set to give boardroom accountability and corporate governance another shake-up in a bid to bring confidence back to the financial sector. Under new proposals, issued today on the back of Sir David Walkers' review of the banking sector last week, the Financial Reporting Council's latest attempt to re-jig the Combined Code on corporate governance of major banks and financial institutions could see company chairmen face annual re-election and external assessments of boards' performance every three years. The independence of non-executive directors and their level of commitment to the board will also come under scrutiny, echoing Walker's recommendations last week that NEDs spend more time on the job and be given proper training for the role. Chairman of the FRC Sir Christopher Hogg said: 'The principal lesson of the financial crisis is that those on boards must think deeply about their individual and collective roles and responsibilities. The chairman has a vital role to play in ensuring that the executives have appropriate freedom to manage the business but also accept the importance of opening themselves to challenge and earning the trust of the whole board. For their part, the non-executives must have the skills, experience and courage to provide such challenge.' The watchdog is also proposing new principles on boards' responsibility and the way they handle risk, along with an emphasis on how performance-related pay should be aligned to long-term company interests and risk policies. Hogg said that although no evidence of serious failings of governance in British business had been found outside the banking sector, the proposed changes to the code could still be used to improve governance for all major businesses. The government is expected to announce this week whether the code will be extended to all listed companies. John Cridland, director general of the Confederation of British Industry, said: 'The FRC is right to promote good boardroom culture over box-ticking compliance. Its focus on ensuring boards are equipped with the right mix of skills and experience is welcome, as is the need for challenge and independence.' Yet he said any proposals for annual re-election, either of the chairman or the whole board, 'will need to be examined carefully to make sure they deliver genuine accountability to shareholders'.