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Banking Bill

I associate myself with many sentiments that the noble Baroness, Lady Turner, has articulated through this amendment. However, I cannot support it, for a couple of reasons. I draw attention to my interests in the Register: I work in a bank and sit on remuneration committees. The way that the noble Lord, Lord Newby, characterised remuneration committees is not one that I recognise. On both the remuneration committees on which I sit, there are no serving executive directors from other companies, for precisely the reason that he stated. The people are all entirely independent and there is no charmed or magic circle. I suspect that most professionally run companies these days take the same view. The principal reason that I resist this amendment is because I think that to interpose a separate individual on a remuneration committee, outwith the normal governance that we would expect through the Companies Act, would be quite wrong. An individual on a remuneration committee who is not a member of the audit committee or of the company’s board, and who somehow has a completely separate set of objectives, would be in an invidious and difficult position, and it would be simply wrong. For all the reasons articulated yesterday by the Minister, we cannot put government-appointed directors on boards and expect them somehow to operate independently of their responsibility to the shareholders of a bank. If that argument is right for the board as a whole, it is doubly right in the case of remuneration committees. It must be right that members of remuneration committees are also independently appointed members of the whole board and take part in all the governance of a bank, and not just part of it. I do not believe that the amendment, as drafted, would achieve the ends that the noble Baroness wishes, laudable though they are. Although I have sympathy with them, we must rely on the independent members appointed to the boards to discharge all of their governance functions, including remuneration, rather than distinctly as members of a remuneration committee.