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Company Law Reform Bill [HL]

moved Amendment No. 166:"Page 69, line 28, leave out subsection (1)." The noble Lord said: In moving this amendment I shall also speak to whether Clause 157 should be agreed to. Amendment No. 166 is a probing amendment designed to seek clarification. It deals with the duty to exercise independent judgment. Two specific issues concern us. First, to what extent can a director under an obligation to exercise independent judgment place reliance on, for example, the chief executive or other executive directors—if he is non-executive himself—or external advisers? Is the obligation for exercising independent judgment in any way affected by the normal reliance which a non-exec would place on advice, a report or recommendations given by others—either members of the board or advising the board? My second concern is a narrow one relating to nominee directors. A nominee director appointed by the corporate shareholder, for example in a joint-venture, may in practical terms not be able to exercise that independent judgment—indeed, that is why he is a nominee director of a corporate shareholder. I would be grateful if the noble and learned Lord the Attorney-General would comment. I beg to move.