HC Deb 12 February 1969 vol 777 cc1299-300
15. Mr. Barnett

asked the President of the Board of Trade if he will initiate legislation preventing directors being trustees of their own company's employees' pension funds.

Mr. Dell

I will consider the suggestion of my hon. Friend.

Mr. Barnett

Is it not wrong for directors to use their powers as trustees of workers' pension funds when mergers are taking place to take decisions which will affect the interest of those workers and when, by the very nature of things, the directors are clearly not able to take an objective view? Should not some action be taken by the Board of Trade in this connection?

Mr. Dell

As my hon. Friend will appreciate, legislation would be required to achieve that, but we shall certainly consider whether it is right to take the action he recommends in the context of further companies legislation.

Sir B. Rhys Williams

Would it not be reasonable to exclude the employees as well as the directors of the firms in question?

Mr. Dell

Directors are in a special position, because there are possible conflicts of interest in such take-over situations.

Sir A. V. Harvey

Is the hon. Gentleman aware that in most cases a very good job is done for workers' pension funds by directors and employees? Does he also realise that when workers are members of an investment panel they are often very careful to select companies which will not be taken over?

Mr. Dell

I entirely accept that in general pension funds are very well administered. Nevertheless, there may be a problem when the whole or a substantial part of a pension fund is invested in the employees' own company, thus increasing the risk to which the employees are exposed.