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Banking Bill

Can the Minister clarify the nature of board membership in this situation? It is important that we understand whether the directors appointed through the public sector to represent the public sector interest will be classed as independent directors, or whether they will be connected persons who are representing directly a particular shareholder interest—that is, the Government. In a normal corporate situation, when directors are appointed by a significant shareholder, whether a minority or a majority shareholder, the presumption is that those people have an interest that is specific to that shareholder and that, when matters arise before the board in which a minority shareholder has an interest that diverges from those of other shareholders, those directors would exclude themselves from that decision, so that the independent directors can properly represent the views of the shareholders at large. I am not clear, and it would be very helpful if the Minister could clarify, whether the intention is that shareholders appointed by the Treasury or by the holding company from the Government are there to represent the Government. If that is the case, will the Government accept all the implications of that: not only exclusion from certain decisions but the confidentiality of information passed to those directors and the implications for those whom they pass it to in terms of their use of it in decision-making? Again, there are quite strict rules on that. Alternatively, is the intention that the directors are truly independent? If that is the case, there should be an important set of provisions making clear that they are not there to represent the Government’s interests but those of shareholders at large, even where they diverge from the Government’s interests. Again, there are very strict rules about not passing information back to the shareholder executive. I have not been clear what category these directors must fall into. Before they are appointed, the terms on which they are appointed and the way in which they use their position and information must be very clear.