Boards need 1,000 new non-execs to comply with Higgs

Derek Higgs, who last month published his review of the health of British boardrooms, yesterday estimated companies would collectively have to find up to 1,000 new non-executives to comply with his recommendations for good corporate governance.

Mr Higgs, whose proposals aimed at improving boardroom behaviour are coming under fire from company bosses, tried to play down reports that the amount of fresh blood needed would be too demanding for businesses to meet.

Some senior business figures have warned that Mr Higgs' stipulations about the number of independent directors required on boards and the number of roles executives can hold could lead to a massive upheaval of current boards.

Critics estimate that companies that do not want to fall foul of the Higgs review, which is set to become part of the Combined Code by July, might have to replace a third and in some cases half of their board. This has led to fears that smaller companies would not be able to comply with the recommendations.

Mr Higgs, who was appearing before the Commons Trade and Industry Select Committee, said the number of new recruits needed was of a "different order of magnitude" to fulfil his criteria, which include ensuring that the majority of non-executives are fully independent from day-to-day management.

He stressed it was difficult to put a figure on how much churn there would be in boardrooms, but said the figure was around "1,000, out of a total population of UK directors of 11,000".

Dr Ashok Kumar, a member of the Committee, asked Mr Higgs whether he was bothered by media reports which highlighted "grandees lining up to denounce" the review.

Mr Higgs, who is also an adviser to UBS Warburg, said: "I discuss things with grown-ups in private forums but it is not my objective to get into a public knock about."

Sir Nigel Rudd, the chairman of the glass maker Pilkington, told The Independent last week that aspects of Mr Higgs' proposals were "absolutely barmy". Sir Peter Middleton, the chairman of Barclays, and Sir Christopher Gent, Vodafone's chief executive, have alsoexpressed reservations.

Mr Higgs hit back at criticisms that his proposals would undermine the role of the chairman, saying: "I sometimes get the impression people have just read the summary and not the review as a whole. It does absolutely nothing to undermine the vital role of the chairman."