HC Deb 04 March 1965 vol 707 cc1510-1
19. Sir C. Osborne

asked the President of the Board of Trade, in view of the fact that directors in large companies own only a small proportion of the capital, and tend to become self-perpetuating, if he will introduce legislation to reform the Companies Act and make compulsory the calling for nominations to boards at the end of each year; and if he will make a statement.

Mr. Jay

Although the Companies Act needs reform in certain respects, the Jenkins Committee did not recommend this particular change; and I am not convinced that it is the best solution.

Sir C. Osborne

Would the right hon. Gentleman look to see if it is not possible to get more of what I would call expert technicians on some of the big City boards rather than distinguished gentlemen from other walks of life—[HON. MEMBERS: "Hear, hear."]—especially in groups like insurance and banking?

Mr. Jay

There may well be much in what the hon. Gentleman says, but this is not at present wholly in my hands, although we hope to legislate on company law in due course.

Mr. Barnett

Is my right hon. Friend aware that many hon. Members on this side of the House will agree with the hon. Member for Louth (Sir C. Osborne) in that there are far too many thoroughly incompetent, self-perpetuating company boards? Would my right hon. Friend agree that in some cases it would be as well if some of the companies closed down and reinvested their funds, whereby the shareholders would be better off? Would he not also agree that in many other instances if the companies would take on to their boards some of the younger executives, many of whom are frustrated, those companies would be very much better off?

Mr. Jay

The trouble is that the party opposite left so many urgent reforms to be done that we cannot get them all through in one Session.