Public Limited Companies (Financial Regulation)

Part of the debate – in Westminster Hall at 3:37 pm on 13th March 2003.

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Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds 3:37 pm, 13th March 2003

My hon. Friend makes an excellent point for my peroration. He is right to say that the combined code already leads to a certain amount of box-ticking. It has been argued that Higgs, if fully implemented—the Government seem to be bent on that—will be a box-tickers' charter. It will be box-tickers' heaven, because any advisers going through the process will go down the box-ticking route, as a back-stop against negligence and as a way of showing that they have done everything right. If in doubt, such advisers will not look at the specific circumstances of a particular company and why that company might, for perfectly good reasons, have deviated from the combined code. For a simple life and as a back-stop against negligence, they will say that the company does not fulfil the requirements of the combined code in its corporate governance regime, will not tick the appropriate box, and, as my hon. Friend pointed out, cause trouble for that company. We are opening ourselves up to such a rules-based approach, which will make a growing problem significantly worse.