Audit and Corporate Governance

Baroness Noakes Excerpts

Tuesday 23rd March 2021 Lords Chamber

[Lord Callanan (Con)]

These proposals are to provide information to expert users and many of the ordinary readers as well. Therefore, both markets are to be fulfilled.

[Baroness Noakes (Con)]

My Lords, no self-respecting non-executive director would take on a directorship unless the company arranged adequate directors’ and officers’ insurance but the cost of cover has been increasing dramatically, alongside market capacity reductions. What assessment has BEIS made of the impact of its new proposals on the D&O market, with consequential impact on the willingness of good candidates to take on board appointments?

[Lord Callanan (Con)]

My noble friend makes a good point but the proposals will not provide a disincentive to people taking on new appointments. It is important to remember that the proposals for directors’ accountability apply only to the largest companies with revenues into the hundreds of millions of pounds and with hundreds, sometimes thousands, of employees. It is right that directors should take more responsibility.