Higgs climbdown on his own review
In a significant climbdown, Derek Higgs has warned shareholders not to push companies into 'mindless compliance' with the proposals in his report on corporate governance.
At the National Association of Pension Funds annual conference in Edinburgh yesterday, he told attendees that the comply or explain approach that dominates his proposals could become ‘comply or breach’ if shareholders took the report in the wrong way.
He advised shareholders to take a pragmatic approach and judge companies on the individual circumstances ‘Don’t create a little hatched empire of corporate governance which has no connection to the substance of investment decisions,’ Higgs was reported to have said in the FT.
The climbdown follows mounting criticism from several business leaders that parts of the review could undermine the role of the chairman and cause splits on the board.