COLUMN-Walker invents the super-non-exec: Neil Collins

-- Neil Collins is a Reuters columnist. The views expressed are his own --

By Neil Collins

LONDON Nov 25 (Reuters) - A central flaw runs through the Walker Review like the words in Brighton rock; where have the super-non-execs he demands been hiding all these years? There's nothing much wrong with his proposed reforms, but practising them will be something else entirely.

Sir David Walker, surely soon-to-be Lord Walker of Corporate Governance, wants to see "fundamental change": more argument in the boardroom, more involvement from big investors, a remuneration committee that sets pay for all top employees, and for the banks to reveal the bands of pay for top earners.

He doesn't require every non-exec to be able to stop freight trains dead in their tracks, travel faster than a speeding bullet or leap whole buildings in a single bound, but he might as well have done. Boards are filled with human individuals with other things to worry about, careers to consider and conflicts to resolve.

Directors must already meet a raft of new obligations under the latest Companies Act, shrinking the time to consider strategy or review proposals -- and that's before the board has ticked the race and gender diversity boxes.

By definition, the non-execs cannot know a business as well as the executives, and the CEO and finance director can effectively shut the part-timers out by burying them in information.

The CEO who needs controlling will ensure that the Walker super-non-execs doesn't stay on the board long, if they ever get there in the first place. The non-execs this CEO wants already have a demanding day job. Their experience and insight may be valuable, but they haven't a hope of "assessing risk and asking tough questions about strategy."

As for roping in the institutional investors, this is fraught with difficulty. The same ones that were recently baying for capital repayments and "more efficient" balance sheets are now grumbling about having to cough up for rights issues to prevent debt covenant breaches.

Fund managers reserve the right to change their minds, and will reject anything that compromises their freedom to dump shares without notice. Finally, the pay band disclosure is welcome -- but we should not expect any "fundamental change" in British boardrooms. -- For previous columns, Reuters customers can click on [COLLINS/] (Editing by Martin Langfield) ((neil.collins@thomsonreuters.com)) here