My Lords, I support the points made by the noble Lord, Lord Sharkey. If the number of independent directors on the court is reduced to seven, and is not far off being equal to the number of resident directors, I am not sure what role the court has. I also raise the point as to what should independent directors of the court be. What sort of people should be there and how should they be appointed? I was surprised when exploring this to be told that there was now a ruling that a member of the court must not be any NED of any form of bank. It seems that, by and large, NEDs on the boards of banks are, in today’s world, almost an extension of regulators. One of their prime governance tasks is to make sure that the banks are run properly, in accordance with regulatory requirements. I would have thought that the independent members of the court ought to be a cross-section of NEDs from banks and other financial institutions, and that to say, “Oh no, you mustn’t have anybody who is an NED of a bank because there is a conflict of interest”, is a complete misunderstanding of the role of the court.
Obviously, if the bank of the individual NED were being discussed, they could leave the room and behave as in the normal arrangements when any conflict of interest arises. However, I repeat: if the court is to do a useful job, it should have on it independent representatives who have first-hand experience of the banking system in this country.