Legal Services Bill [HL]

My Lords, it is always nice to have a new issue to consider in the course of our deliberations. I have looked at what other regulatory bodies have been doing. Like the noble Lord, Lord Hunt of Wirral, I can think of boards—I have sat on some of them—in which the chief executive plays one role and others play a different role. The best comparisons that I could think of were other bodies involved in regulation. Again, I am not trying to suggest that this is not a different, even unique, set of circumstances. None the less, comparisons can be drawn. We looked particularly at the examples of Ofcom and the FSA, which have identical arrangements to those proposed for the boards in this legislation. Indeed, we looked again at Sir David Clementi’s original work, and this was his favoured approach. It brings together the executive and non-executive functions and allows the chief executive, who has an incredibly important role, as the noble Lord will agree, to help to drive the strategic direction of the board. In some organisations that I can think of,the finance director may well be a full member of the board too, because of his responsibilities for finance. Again, that is not necessarily the case, but the Bill allows for someone involved in that way to be part of the board. This is simply the choice that we have made. We think that it is better, in this context, to follow the example of Ofcom and the FSA and bring together the executive and non-executive functions to get that strategic direction. Again, this refers back to Sir David Clementi. I, too, am grateful to the Law Society of Scotland for raising this issue with us, because it gives us a chance to consider it. Having considered the matter, however, I am pretty content that our approach will be a good one and that it will give the chief executive a proper footing on the board to enable it to have appropriate direction.