HC Deb 18 June 1973 vol 858 cc28-30
25. Mr. McCrindle

asked the Secretary of State for Trade and Industry whether, in his forthcoming legislation on the reform of company law, he will consider taking powers to publish a code of practice in relation to directors' expenses and perquisites.

Mr. Peter Walker

I am considering questions of directors' responsibilities in my review of company law.

Mr. McCrindle

Is it not worth recording the fact that the great majority of British companies act with restraint and responsibility on the matters to which this Question refers? Would not the publication of a code of conduct be helpful, so as to reduce the offences of the remaining few to a very small percentage?

Mr. Walker

Talks are now taking place with the CBI and others on this, but it is important to get the law right on disclosure. Under the present law, the 1948 Act requires disclosure of the aggregate of all directors' emoluments, while the 1967 Act requires disclosure of emoluments of chairmen or any highly-paid directors, though not on such a wide scale as the 1948 Act. These are matters that we shall bring into our White Paper on company law to see that full disclosure takes place.

Mr. Paget

If we are to have a capitalist system, are not these sorts of provision rather out of place? Are not Lonrho and Pergamon remarkable success stories in the system? Are not the methods of thrustful, aggressive and, above all, successful practice disclosed by their books—as, indeed, by Watergate—illustrative of the success of the system?

Mr. Walker

It has been a great relief to many of us to see the way in which the Leader of the Opposition has tried to restrain some of his hon. Friends from stopping the system.

Sir F. Bennett

When the Minister is undertaking this review, will he consider including the activities of consultants? After all, very often directors are and can be publicly known, and some of the things about which people have been complaining extend to consultants.

Mr. Walker

Yes, Sir.

Dr. Gilbert

Does not the right hon. Gentleman agree that even more important than the question of directors' perks is the question of the conflict of interest that arises where directors sit on so many boards, particularly those of financial institutions? Will he give his attention to that matter?

Mr. Walker

Yes, Sir.