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Last Updated:  Monday, 10 March, 2003, 02:22 GMT
Chairmen attack post-Enron reforms
Enron headquarters
Enron cast a long shadow over business
Many company chairmen are opposed to the key recommendations of a government-backed review of the role of boardroom directors, a survey published by the CBI shows.

It was carried out as a result of the collapse of the American energy giant, Enron.

But the Department of Trade and Industry says ministers are giving "robust" support to the report.

The Higgs report suggested non-executive directors should regularly meet shareholders, and report back to other non-executives.

The work of former investment banker Derek Higgs, the report is aimed at avoiding a repeat of recent Enron-style scandals by increasing the role of directors without day-to-day responsibilities.

Research done by the CBI found 82% of chairmen of FTSE 100 companies believe changes could prevent their ability to run an effective, unified board.

The report also recommended that an independent non-executive director be in charge of the committees which nominates people to join company boards, to maintain its independence.

The CBI survey found chairmen unhappy at the idea, with 87% of chairmen against the move, and 61% strongly disagreeing with it.

Unintended consequences

CBI director-general Digby Jones said: "Business backs the broad approach proposed by the Higgs Report but chairman have got to be allowed to run an effective unified board.

"My greatest fear is that the law of unintended consequences might stifle the creativity and drive that characterises so much of what is good about UK business."

He said that dealing with shareholders should largely be the preserve of the chairman, with the senior non-executive director only able to talk to them privately in extremis.

He said: "Disallowing the chairman from chairmanship of the nominations committee is also seen as running counter to the drive to maintain a strong unified board. This ban should not apply."

There were mixed opinions on whether chief executives should be stopped from becoming chairmen of the same company.

Half of chairmen disagreed with this view, while 39% agreed with it and 11% said they had no opinion.




SEE ALSO:
Enron's trail of deception
13 Feb 03 |  Business
US bank settles Enron claims case
02 Jan 03 |  Business
US energy firm files fraud suit
26 Sep 02 |  Business
Merrill rejects claims over Enron
30 Jul 02 |  Business


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