LONDON, April 28 British lawmakers will probe
how to improve the way big banks are run and set top pay after
past attempts to strengthen corporate governance have had mixed
results in constraining bonuses or controlling excessive risk
Andrew Tyrie, Conservative chairman of the UK Parliament's
treasury select committee, said there had been progress in
improving the running of banks but there was "still work to do"
when it came to the boards of the country's systemically
He said in a statement the Treasury committee would launch
an inquiry and would take evidence from the financial sector.
"Have you met anybody who thinks we have cracked this
problem? Why was it that so many experienced and technically
competent non-executives - the cream of British corporate life -
appeared to be asleep in some of the boardrooms of our major
financial firms," Tyrie said.
He wants to encourage shareholders to engage on issues such
as risk and bonuses.
Britain is still counting the costs of risk taking by the
banking sector, having been forced to nationalise Northern Rock,
buy most of RBS and a large stake in Lloyds.
Yet Tyrie is not the first to raise the issue of corporate
governance in the financial sector. In one sign of increased
investor activism, over a quarter of Barclays Plc
shareholders voted against a remuneration plan including a 17
million pounds pay package for CEO Bob Diamond.
Tyrie wants the inquiry's findings to shape the work of new
regulators being set up next year when the Financial Services
Authority (FSA) will be scrapped.
He declined to say if new laws would be needed to beef up
supervision of the sector.
Hector Sants, who is stepping down as CEO of the FSA in
June, said in his final speech on Tuesday that banks should
improve their governance and "do the right thing" rather than be
driven solely by the size of their pay packets.