Higgs under fire from City and CBI
A crucial part of the Higgs Report on corporate governance is to come under fire from both the CBI and large institutional investors.
The proposal, from former merchant banker Derek Higgs, is to beef up the role of senior non-executive directors so they can challenge the chairman and chief executive. But it has already been attacked as "divisive" by a number of senior industrialists.
The CBI will now try to persuade Sir Brian Nicholson, chairman of the Financial Reporting Council, that this plan is "fatally flawed". It is the FRC's role to review the plans before they are sent to the Financial Services Authority for incorporation into listing rules for public companies later this year.
Sir Nigel Rudd, head of boardroom issues at the CBI, said the senior non-executive role could lead to multiple splits in boardrooms "and that would be a madhouse".
The CBI may receive support from unlikely quarters. Large fund managers like Isis Asset Management have been persuaded by company direc- tors that the non-executive role could cause problems.
Mr Higgs, currently abroad on business, has said in the past that he consulted widely on his proposals and was convinced they had wide support. His report was commissioned by the Department of Trade and Industry.
But this week Donald Gordon, chairman of property company Liberty International, will become one of the first FTSE 100 bosses to attack the Higgs proposals publicly.
Mr Gordon is expected to make the comments when he presents Liberty's full-year results on Wednesday. He is unhappy about the proposal to increase the number of non-executives and will brand it "the bureaucrats' revenge".
He is expected to say that too many non-execs will make board meetings prohibitively cumbersome and slow down decision-making.
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