ICI chairman Sir Ronald Hampel's recommendations on corporate governance have been welcomed by Herbert Smith partner David Paterson, who chaired the Law Society committee that made submissions to Hampel.
But other lawyers have criticised Hampel for pulling back from earlier groundbreaking reports by the Cadbury committee on corporate governance and the Greenbury committee on executive pay.
The earlier reports introduced stricter procedures for companies' governing boards, while the Hampel committee's interim report wants more boards to think for themselves and state in their company reports how they have applied the “principles” of corporate governance.
Paterson said: “The emphasis on some flexibility in the regime is most welcome. Pressure groups and media interest had turned codes of best practice into holy writs.”
Clifford Chance employment partner Bruce Hedley criticised the report's hands-off approach: “This is a step backwards. It will be difficult for a government to pick out things that can be legislated for.”