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Non-execs face legal battle

The decision by a High Court judge to allow a negligence claim to go ahead against former non-executive directors of Equitable Life is unlikely to result in a mass exodus of NED candidates, says a leading corporate governance expert.

Link: Former Equitable non-execs to face trial

Speaking to Accountancy Age, Timothy Copnell, director of corporate governance at KPMG, said the real issue would be whether there would be a shortfall of the ‘right quality people’ with ‘top companies fighting over a small pool of candidates’.

But he said that events like the Equitable fallout and recent changes to the combined code on corporate governance would see directors questioning ‘whether they can fulfil a large number of NED roles’ given that it is a much more ‘onerous role, with much higher shareholder expectations’.

Last week, Justice Langley ruled that the former non-executive directors at Equitable Life could be sued alongside former executives and former auditors Ernst & Young. A trial is expected to begin in April 2005.

Among those who will stand trial will be chartered accountant Peter Davis, the former lottery regulator and former audit partner at PricewaterhouseCoopers.

He will be joined by Peter Sedgwick, the former chairman of Schroders Bank, Jennie Page, former Millennium Dome boss, and David Wilson, chairman of housebuilder Wilson Bowden and five others.

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