LONDON (Bloomberg) — UK banks and insurers should give non-executive directors greater powers, change their bonus plans, and produce more transparent accounts, according to a group of pension funds that oversee £75 billion ($120 billion).

Non-executive directors of banks and insurers should have a background and qualification in finance, the Local Authority Pension Fund Forum, which represents 49 municipal pension funds, said in an e-mailed statement yesterday. Companies should also consider appointing an independent adviser to help make audits easier for shareholders to understand, the group said. Executive pay should be linked to long-term performance, the group added.

The UK has spent as much as £1.4 trillion ($2.2 trillion) in bailing out the nation's banks through direct investments, asset insurance and underwriting loans. The government has nationalised Northern Rock Plc and Bradford & Bingley Plc, and taken controlling stakes Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc.

"We need to address all the areas where there have been failures," LAPFF chairman Ian Greenwood said in the statement. "Given the scale of what has happened, this is a time for serious reform, not cosmetic changes."