RegulationCorporate GovernanceUnilever calls for halt to reform

Unilever calls for halt to reform

Chairman of one of UK's largest companies calls for a slower pace of corporate governance reform

The head of one of the UK’s largest companies has pleaded with the European
Commission to slow the pace of corporate governance reform, as companies risk
being snowed under by new rules.

Speaking at a DTI conference in London this week, Anthony Burgmans, chairman
of retail product giant Unilever, sent out a warning to EU internal market
commissioner Charlie McCreevy that plans for further action on improving
corporate transparency and accountability should be delayed for some time.

‘We have just seen a wave of new codes coming in,’ said Burgmans. ‘We have
the combined code in the UK, we have the Tabaksblat code in the Netherlands, the
Cromme code in Germany, we have new codes in Belgium and France. We are all now
in the process of implementing that. Please give us time to do that properly and
to learn from that before you unleash the next wave on us.’

At the conference McCreevy had signalled the launch of a consultation on
phase two of the EU company law and corporate governance action plan. He said
‘the timing was perfect’ for a three-month consultation as the first phase of
the plan draws to a close.

But the commissioner’s plans may face resistance. Burgmans argued that
‘cumbersome, over elaborate, inflexible corporate governance rules can promote a
minimalistic view and promote a box-ticking mentality’.

David Pitt-Watson, chief executive of Hermes Focus Asset Management, said:
‘We can’t legislate from Brussels and we probably can’t legislate from a
national government. We need soft laws, professional standards, understandings.
We need owners to take responsibility. We need ethics, and agreement on goals.’

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