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Company Law Reform Bill [HL]

I added my name to the list of people who oppose that Clause 157 stand part of the Bill and I will speak to that. I reinforce what the noble Lord, Lord Freeman, has just said. The Committee may think that this is theoretical, but it is a serious issue. As corporate governance practice develops, we are now regaled with all sorts of definitions of independence. For example, we now know that a director representing a significant shareholder is not determined for corporate governance purposes to be independent. The chairman, once he is appointed, is not determined to be an independent director. Therefore, how does a director exercise independent judgment when for corporate governance purposes he is determined not to be independent? My second point is about the issue of reliance on other directors. Again, quoting the issue of corporate governance, all audit committees in listed companies in the UK these days—particularly those that are registered for Sarbanes-Oxley in the US—are required to have a designated financial expert. That is somebody who, in terms of corporate governance, is seen to have a higher level of expertise or skill than other members of that audit committee. Are the other members of the audit committee, taking into account the requirements of this clause, able to rely on his advice or counsel? Similarly, if the general council of a company is a member of the board, are the board able to rely on the advice from the general council in that regard? I would appreciate clarification.