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Employers believe government proposals to reform corporate governance will undermine the role of company chairmen, according to a poll released today.
In a government-commissioned review, former investment banker Derek Higgs called for non-executive directors to have regular meetings with shareholders. He also recommended a ban on company chairman heading the nominations committee, following a series of boardroom scandals in the UK and US.
However, eight out of 10 FTSE companies that responded to a CBI survey said the proposals would undermine the role of chairman and their ability to run an effective, unified board.
Higgs' recommendation that an independent director chair the committee nominating people to the board has been dismissed as unworkable by business. Higgs wanted to strengthen the autonomy of non-executives, but 87 per cent of the 61 companies polled said that they were against the move.
"Business backs the broad approach proposed by the report, but chairman have got to allowed to run an effective unified board," said CBI director-general Digby Jones.
"My greatest fear is that the law of unintended consequences might stifle the creativity and drive that characterises so much of what is good about UK business.
"Disallowing the chairman from chairmanship of the nominations committee is also seen as running counter to the drive to maintain a strong unified board. This ban should not apply.
"One-size-fits-all will not be good for British business or wealth creation," he said.
