Beckett hints at plans to tighten corporate governance

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The Independent Online
The Government yesterday dropped a heavy hint that it planned tougher corporate governance rules, going beyond the recommendations of the Hampel Committee. Margaret Beckett, President of the Board of Trade, said there was a view that the draft report published by Sir Ronnie Hampel, the chairman of ICI, "wasn't sufficiently strong in some respects" and that measures were necessary to toughen and widen its remit.

Addressing the Confederation of British Industry's annual conference in Birmingham, Mrs Beckett said: "We want forms of governance and company law that encourage companies to invest and grow - to take the long-term strategic view and a broad view of their obligations. They should also ensure openness and accountability not least in the relationship between shareholders and managers."

Advisers later played down suggestions that the Government was poised to legislate to oblige companies to invest more. But it was made clear that new statutory obligations, giving shareholders more power were under consideration.

Mrs Beckett also took British industry to task for its poor performance in comparison to competitor nations. She said that companies had to benchmark their performance against the best in the world, not just the best in the UK.

- Michael Harrison