Financial non-execs feel the pinch

By Kirstin Ridley

LONDON (Reuters) - The gilded cage of non-executive directors is being rattled by government-backed calls for greater expertise and dedication in a move set to make some demand more pay and others baulk at a job in banking.

The publication of David Walker's review on Thursday of banks' board quality, pay policy, risk management procedures and the role of shareholders, may herald a dramatic shift in the extent to which non-executives are expected to get into the underbelly of financial organisations.

In the past City of London alumni have been accused of collecting non-executive directorships to pocket healthy salaries while showing up once or twice a year for board meetings and dinners.

The Walker Review, commissioned by Prime Minister Gordon Brown in February, is part of the UK effort to curb the excesses at banks that helped plunge Britain into economic crisis and force irate taxpayers to pick up a 1.3 trillion pound bill in bank bailouts and guarantees.

Proposals include giving non executives a direct say in deciding pay arrangements for top earners, not taking executive answers at face value and spending at least 30-36 days per year scrutinising executive behaviour at major banks.

"In effect, it's a ban on box-ticking," said James Perry, co-head, financial institutions group at law firm Ashurst.

"But big financial businesses are always complex, and getting to understand them involves a big commitment -- probably more than 30-36 days a year. So, non-execs will have to be well-rewarded for that commitment -- and for the risks they're taking on. Otherwise, who'd be a non-exec?"

A banker working for an international financial institution said: "I wouldn't queue to be a non exec of a bank. Some of the non execs in the organisations that went down had a thankless time. The question going forward will be how much personal liability goes with the job."