The Government is determined to introduce the recommendations made by the
Higgs review on the role of non-executive directors despite opposition from
business.
Ruth Kelly, financial secretary to the Treasury, told delegates at the
National Association of Pension Funds conference last week, that the
conclusions of former investment banker Derek Higgs were necessary to improve
the independence and diversity of non-executive directors and would be
introduced.
Her comments followed a CBI survey revealing 80 per cent of FTSE 100
chairmen oppose the recommendations, which in-clude plans for non-executive
directors to have regular meetings with shareholders.
Under the proposals, company chairmen would also be banned from heading
nominations committees.
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Kelly said the proposed reforms provided a robust way forward without the
need for ‘clumsy legislative’ intervention.
However, the CBI’s director general, Digby Jones, commented: "Business
backs the broad approach proposed by the report, but chairmen must be allowed
to run an effective, unified boards."
