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Geoffrey Forster, the senior independent director this week appointed temporary chairman of Torex Retail, is set to more than double his earnings after billing the embattled Aim-listed software developer more than £100,000 in consultancy work in the last financial year.
Documents seen by the Financial Times show that Mr Forster has invoiced Torex for work in addition to his role as an independent non-executive director.
Invoices included an £88,125 bill for banking work related to Torex’s acquisition of Savista, a rival retail point-of-sales systems provider, in April 2006.
The payments are likely to cause corporate governance experts to question whether this business relationship might compromise Mr Forster’s role as an independent director.
The UK’s combined code on corporate governance, which sets a benchmark of best practice for companies, states: “The board should determine whether the director is independent in character and judgment and whether there are relationships or circumstances which are likely to affect, or could appear to affect, the director’s judgment.”
It says companies should disclose whether the director “has, or has had within the last three years, a material business relationship with the company.”
One corporate governance expert said: “A senior independent director cannot fulfil his role if he has a material business relationship with the company – unless he has an explanation that is accepted by all shareholders.”
Aim-listed companies are not bound by the code but shareholders expect all companies to “have regard” to it, he said.
Mr Forster also billed the company for £17,625 for additional work as chairman of the audit committee and £4,700 for fees related to his chairmanship of grievance procedures.
The total of more than £100,000 compares with the £18,000 in salary and fees that he was paid in 2004 and £43,000 in 2005.
Pensions Investment Research Consultants said that while the UK’s leading companies often pay more to non-executives to chair boardroom audit or remuneration committees, it would not consider billing for banking services as best practice.
“Technically it is not illegal, but best practice for non-executive directors would mean that they should not be involved in any operational work,” said the corporate governance body.
Mr Forster declined to comment. He was appointed non-executive director in April 2004.