UK - Corporate governance review author Derek Higgs has broken his own guidelines, research by pension funds shows.
The National Association of Pension Funds made the discovery while analysing internet banking group Egg’s corporate governance records.
NAPF’s voting issues service found that Higgs was on Egg’s remuneration committee, despite having been an executive director of the firm’s parent Prudential.
But, under Higgs’s own guidance, anyone who has been an executive director of a parent company within the last three years does not qualify as independent.
NAPF spokesman Andy Fleming said: “We applied exactly the same principles to Egg as we do to other FTSE350 companies – as part of that we highlighted the fact that there are three members of their remuneration committee who are not, in our book, independent. One of them is Derek Higgs.”
This is the second time Higgs has come under scrutiny by the NAPF. In June last year the NAPF said two of the four non-executives on the board of British Land were not independent – Higgs was one of them.
But Fleming said the revelations do not undermine NAPF’s support for the Higgs Review.
“We know he has a series of non-executive positions, but our view is that it doesn’t matter. We raised a couple of points about the drafting, but the principles in the review were spot on.”
Proxy voting agency Manifest took a difference stance on Higgs’s independence, however, and accused the NAPF of a “box-ticking” mentality.
Manifest managing director Sarah Wilson said: “Prudential holds a 79% share of Egg, so it would be unusual for it not to have a nominee on the board. The NAPF report clearly demonstrates the case against box-ticking.”
Higgs was criticised by F&C Management senior director David Manning over his position at British Land.
Manning claimed that a person “less tainted” may have been better to conduct the review.
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