Corporate Governance - Firms trample governance rules
Companies are beginning to ride roughshod over guide-lines on corporate governance, according to a report by Edinburgh-based accounts monitor Company Reporting.
Three recent sets of accounts show that, despite the combined efforts of Cadbury, Greenbury and Hampel, companies continue to breach basic rules designed to increase transparency.
Lonrho, the troubled mining group, and First Leisure, run by former Channel 4 chief Michael Grade, disclosed changes to directors’ terms and conditions conflicting with Greenbury’s recommendations. The companies, both audited by KPMG, ignored the ruling that directors’ service contracts should be reduced to one year or less.
Lonrho expanded notice periods for two directors from more than one year to no less than two years, while First Leisure increased its managing director’s contract from two years’ notice entitlement to a three-year fixed term.
Graeme Farmer, an editor of the report, said: ‘It seems Hampel, like those before it, offers little more than toothless guidance.’ He added Astec, audited by Price Waterhouse, pushed through changes to the composition of its board that are likely to fall foul of the Cadbury code of best practice.