Company law Commission aiming to help British business back into 21st century

LAW REFORM: Solicitors welcome key recommendations in steering group's final report

Solicitors last week welcomed final recommendations by the independent company law review steering group to the government, ahead of a proposed major shake-up of company law.Key recommendations in the final report include a radical simplification of the law for smaller companies; statutory statements of directors' duties; an annual operating and financial review for larger companies; greater use of technology in annual reporting; ditching complex rules on share valuation, and setting up a new body to review company law on a rolling basis.Andrew Davison, chairman of the Law Society's company law committee, welcomed the report, saying: 'It is vitally important that the government now acts on these recommendations and does not let this document sit on the shelf gathering dust.'He said the Society had pressed the government to establish a companies commission (an ongoing review body) for more than a decade.

He added: 'We are delighted the review has come out in favour of such a body.

We will now focus our efforts on securing government commitment to provide the necessary funding.'City firm SJ Berwin's head of corporate finance Philip Goldenberg - a leading adviser to the review on directors, shareholders and stakeholders - said the report's combination of 'enlightened shareholder value' and 'greater transparency' was the key to successful corporate governance.He said the steering group's report discarded 'shareholder versus stakeholder' arguments as 'bogus British adversarialism', and instead adopted a more inclusive approach, which 'gets it absolutely right'.Trade secretary Patricia Hewitt welcomed the report, saying: 'Years of neglect have left us with an archaic, Victorian system that is holding British business back.

We want to bring British company law into the 21st century.'The review took three years to make its final recommendations.

Ms Hewitt said the government would consider the recommendations and a draft Bill would be produced in due course.

She said she is keen to pass legislation in this Parliament.LINKS: www.dti.gov.uk/cld/review.htmJeremy Fleming