letters to the editor:Stock Exchange and the pay debate

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From Mr M. J. Ainsworth Sir: The recent controversy on director's pay has culminated in an undignified race by various bodies to form committees and produce codes of practice. The Institute of Chartered Secretaries and Administrators (ICSA) supports the good intentions and welcomes the principles underlying the work published by the Institute of Directors, but believes that a more co-ordinated response is required.

As custodians of the governance issues within companies, company secretaries are of the view that the IoD's framework for remuneration committees is already being applied in most responsible companies, but fear that companies cannot be expected to complywith dozens of different standards issued by different bodies on the same subject.

Shareholders, too, must find it confusing and be asking themselves which code their companies should be applying. And if shareholders are confused, have we not lost sight of the purpose of this effort?

Recent events have demonstrated that, where self-regulation is the Government's preferred solution, a standing committee is needed to tackle these issues as and when they arise. The Cadbury Committee has proved that this can be done effectively with the help of other organisations and the Institute would strongly support new recommendations introduced through this respected channel.

Despite the fact that it has kept a curiously low profile on issues of corporate governance, the London Stock Exchange played a crucial role in the success of the Cadbury Committee's code of best practice.

Is the time not ripe for the Stock Exchange to assert its authority and play a more public role in corporate governance as the co-ordinator of any such standing committee?

Yours faithfully, M. J. Ainsworth Chief Executive & Secretary The Institute of Chartered Secretaries and Administrators London, W1

26 January