Walker probe to hit boards

BRITISH boardrooms are set for their most radical shake-up in years, with Sir David Walker set to recommend annual election of directors and the introduction of powerful risk committees in his review of corporate governance, due out this Thursday.<br /><br />Walker, who was charged with looking into the future of bank governance by chancellor Alistair Darling, is expected to make a series of recommendations that could fundamentally change the landscape of the boardroom.<br /><br />His proposals will include forcing non-executive directors to receive formal training in the activities of the companies they represent, while they will be discouraged from taking too many boardroom roles.<br /><br />Walker will also call for remuneration committees to review pay policies in relation to risk strategy, with the aim of following through on the government&rsquo;s rhetoric of &ldquo;no reward for failure&rdquo;.<br /><br />To that end, Walker will recommend that banks have strong, independent risk committees capable of curbing the risk appetites of executives, while junior executives will also have to demonstrate their independence from a bank&rsquo;s leadership.<br /><br />Among other measures set to be unveiled on Thursday, Walker will suggest that bank&rsquo;s boards be re-elected every year, to give shareholders more of a voice in directing corporate strategy.<br /><br />The City veteran will point to the dislocation between shareholders and the companies in which they invest as a key factor contributing to the severity of the financial crisis.<br /><br />Walker&rsquo;s findings will feed into Darling&rsquo;s white paper on financial regulation, which promises tougher supervision by City watchdog the Financial Services Authority (FSA) and the introduction of incentives to minimise risk at financial institutions.