IoD chair hits out at City scheme for annual board elections

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The Independent Online

Neville Bain, the chairman at the Institute of Directors (IoD), has hit out at City regulation that forces board members of all FTSE 350 companies to face re-election every year.

Introduced this summer, the move replaces the regime that saw directors stand for election every three years. There are fears that activist investors will use an annual vote to impose ideas on reluctant management.

Mr Bain, the former Royal Mail chairman, said: "Annual board evaluations are a bit of a nonsense. I can't see what there is to gain other than to play into the hands of any rebel shareholders."

The New Zealander was speaking ahead of the publication of his new book on boardroom best practice. The Effective Board, which Mr Bain has co-written with the IoD's head of corporate governance, Roger Barker.

Mr Bain was Royal Mail chairman from 1998 to 2001 when his contract ended. He was replaced by former Asda boss Allan Leighton.