ITUTE of Directors (IOD) chairman Neville Bain has slammed the new rules that force board members at top firms to face annual re-election.
Bain, the former chairman of Royal Mail, warned the recommendation that FTSE 350 directors must pass a vote of confidence once a year could play havoc with shareholder relations.
“Annual board evaluations are a bit of a nonsense. I can’t see what there is to gain other than to play into the hands of any rebel shareholders,” the Independent on Sunday reported him as saying ahead of his book launch on boardroom best practice.
Several industry bodies including the IOD and the CBI lobbied against the guideline before it was introduced by the Financial Reporting Council in June. The IOD said it risks destroying the collective nature of the board.
The Council was unavailable for comment yesterday.