The Higgs report into non-executive director practice will only prove an effective framework if investors play their part, believes its author.

Derek Higgs, the former banker and author of the recent UK review, said: "Clearly, shareholder capitalism will only work if both owners and boards play their part intelligently. My whole approach is based on comply or explain. If the explanation is a good one, the shareholders should take it on board. I've talked to a number of fund manager, and many of them recognise that the explanation is as valuable as compliance."