CBI 'revolt' over further rule changes
Saturday 11 November 1995
The CBI is to oppose any further significant changes in the rules on top pay and corporate governance after a members' revolt against demands put on them by recent new measures.
Adair Turner, director general of the CBI, warned that industry was feeling "corporate governance fatigue" and wanted to digest the changes of the last few years, culminating in the Greenbury Committee on executive pay this summer
In some areas, such as the burden on smaller quoted companies from forming Greenbury-style remuneration committees, it might be time to deregulate, he added.
The CBI wants the second stage deliberations of the Cadbury Committee on corporate governance to be restricted in what it can do and not to open any major new issues. "We will be discouraging it from being overambitious," he said.
The CBI's tough line on what the new Cadbury Committee should take on is thought to be contributing to delays in setting up the body, which is meant to continue the pioneering work on boardroom standards of the first Cadbury Committe.
Sir Sidney Lipworth, chairman of the Financial Reporting Council, has agreed to find members and a chairman for the new committee but has had difficulty persuading enough senior figures to take on the job. Some are thought to have been discouraged by the harsh media treatment given to Sir Richard Greenbury and his top pay committee members.
In an interview ahead of next week's annual CBI meeting in Birmingham, Mr Turner said the new Cadbury Committee should be "a backstop body to deal with necessary issues if and when they come up, with no intention of identifying and driving forward a new agenda - deliberately producing a blockbuster report for the sake of it."
Mr Turner suggested that one function of the new Cadbury Committee should be to "deregulate" by drawing up plans to exempt smaller quoted companies from some of the more onerous Greenbury proposals, particularly for remuneration committees.
Although there is a let-out in the proposals for companies that do not want to set up remuneration committees, they have to explain why to their shareholders, which Mr Turner thinks might discourage them from an otherwise sensible opt-out. The implementation of Greenbury rules on corporate governance is still under discussion at the Stock Exchange.
The CBI set up the Greenbury Committee and backed its conclusions in a report in July, but there has been been a growing backlash in industry.
Mr Turner said "Not all our members are greatly happy with Greenbury ... there is a very strong feeling we have to digest and put in place the changes put forward through the corporate governance process and Greenbury." After a flow of new measures ... there was "a significant feeling of corporate governance fatigue in the business community".
The new Cadbury Committee is backed by the CBI, the Institute of Directors, the Financial Reporting Council, the Association of British Insurers and the National Association of Pension Funds.
Mr Turner said the CBI still ''broadly supports" the Greenbury recommendations. However, it has asked the Chancellor to change the tax treatment of share options in the Budget so tax is levied only when shares are sold, to encourage executives to hold them. In the summer, the Chancellor abolished capital gains tax treatment and levied the whole tax on exercise of the options.
- 1 Heavy metal producer's corpse to be mutilated by models as per his dying wish
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 3 Nineteen-year-old student left gifts for parents before taking her own life
- 4 Deliberately urinating before sex can increase risk of urinary tract infections
British Muslim leaders outraged after Eric Pickles says followers of Islam should 'prove their identity'
UK terror fears: My jihadist son returned from Syria mentally scarred – now he is being ignored
Nigel Farage: NHS might have to be replaced by private health insurance
Billy Crystal: 'Stop shoving gay sex scenes in my face'
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
David Cameron says anyone criticising Eric Pickles' letter to Muslims 'really has a problem'
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...