Despite the warm welcome for the Higgs and Smith reports, some have been willing to express reservations.
Link: Higgs’ special report
Charles Tilley, chief executive of CIMA, sounded a note of caution about the information non-executives receive from their executive colleagues.
‘For non executives to function effectively requires more than regulations. It requires good quality information that is relevant, timely and easy to understand. NEDs are only as good as the information they have to work with,’ he said.
ACCA warned of ‘overwhelming strain’ that could be placed on the ‘cohesiveness’ of some boards attempting to comply with the recommendations. ACCA is concerned that efforts to produce enough ‘independent’ directors will result in the appointment of some not qualified for the job. Smaller quoted companies are especially at risk, it added.
David Bishop, chairman of ACCA’s working group on corporate governance, said the huge demand for NEDs could ‘lead to less qualified and experienced people finding their way into boards and small listed companies spending considerable resources training and supporting them’.