Several leading investment firms in Britain have rallied to the defence of proposals aimed at carrying out sweeping reforms in company boardrooms, the Financial Times said yesterday.
The newspaper said about 15 investment houses had written to it urging for the reforms, proposed by former investment banker Derek Higgs, to be adopted without delay.
The demand comes as UK's Financial Consulting Council, which oversees changes in corporate governance rules, completed its process of consultation with industry and investors on Mr Higgs' proposed changes yesterday.
Mr Higgs, a former SG Warburg banker, was asked by the British government to suggest ways to drastically overhaul corporate governance rules in order to prevent Enron-style accounting scandals erupting in the UK.
In his report made public in January, he recommended a number of changes to increase the power of independent company directors to monitor company executives on behalf of shareholders.
Mr Higgs' proposals have the broad support of the British government, but have been opposed by big business and accountants on grounds they are too prescriptive and may end up dividing company boards.
However, the Financial Times said investment groups supported the broad thrust of the changes to the Combined Code of Corporate Governance - the industry standard for best business practices.
"Some constructive refinement may prove useful. However, wholesale change or delay is not required," the newspaper quoted from a letter sent to it by the investment firms.
The letter's signatories included Aegon, Cooperative Insurance Society, Gartmore, Henderson, Isis, JP Morgan Fleming, Jupiter, Merrill Lynch Investment Managers, Schroders and the Universities Superannuation Scheme, it said.
Meanwhile, other British newspapers reported that business consultants RSM Robson Rhodes had warned that implementing Mr Higgs, proposals would cost UK-listed companies some £200 million.
Robson Rhodes, in a report to the Financial Consulting Council, said some 2,000 firms would need to allocate £100,000 each to comply with Mr Higgs' proposals, they said.