Phoenix Venture Holdings, the owner of MG Rover, yesterday bowed to public disquiet over directors' pay and the financial restructuring of the cars group by appointing its first non-executive director.

Nigel Petrie, the chairman of Manchester-based electronic security equipment maker Dedicated Microcomputers, is to set up and chair an audit committee and a remuneration committee for Phoenix.

He said: "The same principles of corporate governance that apply to listed companies have to be met here, and there can be no difference."

Mr Petrie, a former National Grid human resources director who later ran pumped storage business First Hydro in north Wales for American power group Edison, is to be paid £25,000.

He will get a further £25,000 as a non-executive director of Rover, Britain's largest independent cars group. He was selected from around 30 candidates - partly because of his experience outside the motor industry, said Peter Beale, PVH's deputy chairman.

Rover has been hit by falling sales since disclosures about multi-million-pound salary and pension packages for the four Phoenix directors who bought Rover for £10 from BMW four years ago.

But Mr Beale, whose consortium was accused of "financial sleight of hand" by Martin O'Neill, the chairman of the House of Commons trade and industry committee, said the car busines was now intended to break even next year - rather than the target date of 2006, when its new medium-sized car should be on sale.

Mr Beale said Mr Petrie had extensive experience in turning around and improving businesses. "We hope that he will bring those skills to our organisation - and he met our key criterion of adding value to the business," he said.

Mr Petrie's appointment is linked to the recent partnership deal between Rover and Shanghai Auto, the Chinese state-owned car group which is to inject capital into the medium-sized car project.

Mr Beale said the new audit committee would review how PVH disclosed financial information while Mr Petrie had a free hand to set up a remuneration committee, drawing on outside advice.

Aides said further non-executives could be chosen.

The TGWU union, which had pressed for an independent director, said Mr Petrie's appointment would help Rover "in restoring the confidence of the workforce, customers and investors".