MP bids to hold directors to account for losses | News | Money Marketing

Via MP bids to hold directors to account for losses | News | Money Marketing:

All-party Parliamentary group on economics, money and banking chair Steve Baker wants directors of financial institutions to be forced to take personal liability for their firms’ losses.

In a private member’s bill to be debated later this month, Conservative MP Baker calls for any losses to be “made good” first by directors’ bonuses which should be held back for five years, and then by personal bonds worth £2m or half of the director’s net wealth.

I’ll blog a little more about the provisions I propose from Monday.

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Comments & Responses

4 Responses so far.

  1. Simon Cooke says:

    I like a lot of what you say Stave but this is really silly. Most directors simply aren;t that well paid or that rich – most companies wouldn’t have any directors if this degree of personal liability was introduced.

  2. purpleline says:

    Dear Mr Baker,

    I do believe you need to understand English contract Law and how banks operate. The type of legislation you propose is anti business and would see many people leave boards creating a mess, it will also be a disincentive to bring people up through the ranks.

    The way to get accountability is to regulate the pension industry who hold shares in the financial services companies and the stock exchange these companies operate on. Good governance is the key and investor responsibility is paramount to curbing excesses.

    Therefore televised AGM’s and remuneration boards of public quoted companies with activist shareholders permitted to speak and if 55% of the vote block remuneration.

    One thing that you should consider is making Cabinets financially responsible for their actions and Whitehall who spend money like confetti. Gordon Brown cost this nation billions and he as well as his administration should be subjected to a public inquiry.

    PeterB (Purpleline)

  3. Kulgan of Crydee says:

    I hope this would apply to MPs as well dho are the directors of UK Plc

  4. Paul Peacock says:

    I think this would help alleviate the problem of the obscene bonus culture that banks have undertaken. RBS would be a prime example, posting a huge loss (again) yet people are being rewarded for this abyssmal performance. If the directors are to be held accountable, perhaps they would be less inclined to make bonus payments to poor performing executives. I don’t feel this will go down too well with many Conservatives though, so good luck trying to get this implemented.