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Company Law Reform Bill [HL]

I too believe that transparency is absolutely essential in these matters. While listening to the debate, I found myself thinking about one of my favourite films, ““Cool Hand Luke””. I do not know if noble Lords have seen it, but by the end of the film Luke has escaped far too many times and has seven bells knocked out of him by his captors. The head of the prison comes along and says in a great Southern drawl, ““What we have here is a failure to communicate””. That is what we have here, I think. If we are not achieving transparent communication of information about directors’ pay through the reporting systems we have at the moment, we have a fairly serious problem on our hands. That is because a huge amount of time and effort is being expended by boards of directors on this issue. For a board on which I serve, the report of the remuneration committee alone was twice as long as the operating and financial review and twice as long as the directors’ report. If documents of that length are being produced but the message of transparency is still not getting across, something is wrong and it needs to be looked at. I do not believe that the amendments being proposed by the noble Lord, Lord Lea, will help all that much, but there are some issues to be addressed. If there is a notion that there is a select circle of chief executives who just bump up each other’s pay, that is easy to dispel. On none of the boards that I serve will we allow anyone who has a largely full-time executive role, even if they are an independent director, to serve on the remuneration committee.