Directors must take the new rules on board

FOR months now, the wailing and gnashing of teeth has been ferocious. Yet last week Derek Higgs' recommendations for the biggest overhaul of boardrooms in a decade were adopted practically unchanged. And, surprise, surprise, hardly a word of dissent was uttered.

Yes, Higgs has accepted that chairmen can head committees to appoint new directors to the board. And the role of the senior independent director has been clarified to minimise the chance that this person could be seen as an alternative powerbase to the chairman.

But otherwise his rules have emerged remarkably unscathed, despite the wall of hostility from business that greeted them.

Ordinary mortals - those who do not earn phone-number pay packets - could be forgiven for wondering what all the fuss was about.

It is hardly a radical idea that most directors should be independent non-executives - this is exactly what minority shareholders in fashion chain Monsoon need after the decision by the ruling Simon family to buy back more equity.

Nor is it outrageous that Higgs recommends that chief executives should normally not step up to become chairmen, a position from which it would be almost impossible not to breathe uncomfortably down the neck of a successor.

And, gosh, shareholders are asked to cast votes at annual meetings after a bit of thought rather than simply ticking the boxes.

That any of this was seen as other than plain good sense is a remarkable indictment of the changeaverse nature of the most senior people running our companies.

Boards may have watered down a couple of Higgs' suggestions. They should now get on with implementing the rest so investors can feel more confident for the future.