IoD's Cox is latest Higgs critic
Derek Higgs and his report on non-executive directors received further criticism last week when he was accused of overlooking investor relations.
Link: Higgs special report
George Cox, director general of the Institute of Directors, said that Higgs left out the important issue of a company’s relationship with its institutional investors in his report on corporate governance.
In particular, he claimed the Higgs report neglected to improve the involvement of institutional investors in company decision making.
He told Accountancy Age that the issue with the report was not that the proposed reforms were misguided, but that it assumed a relationship with institutional investors that failed to square with reality.
Although Cox agreed with the ‘basic thrust’ of the report, he said it contained many ‘misconceived ideas’.
He added: ‘We want institutional investors to become more engaged in the company. If they just tick boxes it defeats the purpose.’
He said that the idea of singling out the chairman of the board was ‘dangerous and divisive’, and that the current unitary board system was threatened.
He also believes the proposals to have a non-executive director for every company executive could result in ‘large unwieldy boards’.