Outlook: Labour should leave company law alone

Sir Clive Thompson is no fool. He may be a member of the Hampel Committee on Corporate Governance but Sir Clive made sure that when its final report was published yesterday he was 5,000 miles away sunning himself on a Barbados beach and not in London taking the brickbats.

It is bad enough trying to pin down what makes for good corporate governance and even harder attempting to devise standards of best practice for boardrooms to live up to. Thus, Sir Ronnie Hampel, chairman of the eponymous committee, got it in the neck from both sides yesterday, the corporate governance fascists who felt he had not gone nearly far enough and the vested interests of big business for whom even the nomination of a lead independent non- executive is a step too far down the slippery road to prescription. The language of the final report may be more muscular here and there, the odd word dropped in which, though not prescriptive, leaves directors and shareholders in no doubt where Hampel thinks their responsibilities lie. But it was never going to be a box-tickers' charter and so it has proved.

Whereas Cadbury was born out of a series of high-profile corporate failures and Greenbury out of the fat-cat excesses of the privatised utilities, Hampel never had quite the same reference point to give its deliberations some proper context. As a result, the idea got about that Sir Ronnie was all set to water down his predecessors' recommendations.

As it transpires, he has not done so. Neither, however, has he broken new ground other than in requiring an increased level of disclosure of the internal workings on the nation's boardrooms.

Until yesterday, it seemed that this approach also suited the Government, Labour having discovered that corporate profligacy was a good stick with which to beat the Tories while in opposition but not much use as a prop now that it is in office.

Margaret Beckett, the President of the Board of Trade, appears to have pulled a flanker, however. She is simultaneously supporting the voluntary, best-practice approach advocated by Sir Ronnie while launching a large review of company law which may well result in the DTI legislating all over Hampel's patch.

Mrs Beckett is welcome to tidy up some of the loose ends of company law. But if the urge comes on to legislate in the boardroom, she should take a leaf out of Sir Clive's book and lie down in the sun until the feeling goes away.

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