LSE piles more pressure on Higgs' rules
The London Stock Exchange has added to the mounting pressure for changes to the Higgs' Report on non-executive directors by asking for his rules to be transformed into 'principles'.
Link: Higgs in depth
In a statement today the LSE said it was ‘for’ Derek Higgs’ report, but wanted to see the a ‘prescriptive’ rules-based approach avoided because it would only provoke ‘box ticking’.
Don Cruickshank, chairman of the LSE, said: ‘The level of prescription and aggregation of rules – we move from 13 to 43 – may take corporate governance standards in an unwelcome direction. An increased number of rules would cement the box-ticking approach we are starting to experience in the UK. There is a danger that long sets of rules create a mindset of “anything is allowed as long as it is not precluded”.’
The LSE moves comes after ICAEW president Peter Wyman recently made a rescue bid for the Higgs’ report in the face of withering criticisms from the City.
Wyman claimed it was the way in which the new Combined Code on Corporate Governance had been drafted that lay at the root of concerns, not the Higgs report itself.
He called for implementation of the Code, due on 1 July, to be postponed until January 2004.