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Cima warns of Walker effect.

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The impact of Sir David Walker's review of corporate governance in the UK banking industry could extend into other sectors, CIMA has predicted. The institute is consulting senior members in a range of businesses in order to make its formal response to the review. Key areas of concern include the evaluation of board performance, executive remuneration and the role of institutional shareholders.

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"It is essential that the wider business community does not end up paying, through an additional regulatory burden, for the banking sector's mistakes," said Charles Tilley, CIMA's chief executive. "While we appreciate that this is not the intention of the review, we want to alert businesses across the UK that they must be aware of the implications." Meanwhile, experts are examining the implications of the Walker recommendations. A particularly important one is recommendation 33--concerning "high-end executives"-which suggests that even short-term bonuses should be paid over three years and that these may be cancelled if performance is later found to have been overstated.

Nick Ralph, partner at Archon Solicitors, warned that such proposals could have farreaching consequences. "Employers will need to be much more specific about the levels of performance required to generate bonuses and keep performance records to show to the executives concerned. This will make...

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