Audit and Corporate Governance

Debate between Lord Reay and Lord Callanan

Tuesday 23rd March 2021 Lords Chamber

[Lord Callanan (Con)]

We are not appeasing the big accountancy firms; many of them do not like some of our proposals. These are worthwhile reforms that will improve the market and help to bring about the state of affairs that the noble Lord refers to.

[Lord Reay (Con)]

My Lords, the White Paper proposals place onerous obligations on directors of larger businesses. Does my noble friend the Minister share my concerns that the reforms will discourage candidates, due to the increased and unnecessary liability? Further, does he agree that companies will face greater regulation, higher directors’ fees and indemnity costs at a time when the noble Lord, Lord Hill, is, sensibly, attempting to improve access to capital markets?

[Lord Callanan (Con)]

I do not agree with my noble friend. As I said earlier, accountability for directors applies only to those in the largest businesses—that is, those with revenues in the hundreds of millions of pounds and potentially thousands of employees. The new sanctions will apply only in cases where directors have clearly failed in their duties as set out in law, so I do not believe that there is a conflict with the proposals made by the noble Lord, Lord Hill.