The UK Government has launched a consultation exercise over proposals to strengthen the UK’s corporate governance framework and shareholder influence over executive pay.
The paper sets out a range of options on addressing concerns around levels of executive pay, increasing representation of workers, customers, suppliers and investors in the boardroom, and whether our largest private companies should be subject to more rigorous corporate governance rules.
It calls on businesses, investors, workers and members of the public to give their views on what should be done to ensure that the UK’s corporate governance framework helps to deliver an economy that works for all and maintain our reputation as the best place in Europe to do business.
New measures include:
- strengthening the corporate governance framework for the UK’s largest privately-held companies,
- which types of company need to strengthen stakeholder voices and how best the opinions of workers and customers can be better heard in the boardroom, and
- increasing shareholder influence over directors’ remuneration, including increasing transparency and simplifying and strengthening long-term incentive plans.
While businesses provide employment for millions of people and contribute £140 billion a year in taxes for public services, the Government believes that confidence and trust in business could be improved if more boards took wider employee and other interests into account, planned and invested for the long term and ensured that executive pay genuinely reflects business performance.
“The Government is determined to make Britain one of the best places in the world to work, to invest and to do business, and part of that means continuing to have a framework of corporate governance that is admired across the world,” explained Business Secretary Greg Clark.
“This review will help us achieve that aim and the views of businesses, investors, employees, consumers and others with an interest in successful business are warmly welcomed,” he added.
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