Member Article

PM to take aim at dodgy bosses and boardroom excesses

The Prime Minister, Theresa May, is poised to announce new measures aimed at cracking down on corporate malpractice and boardroom excesses at large privately owned businesses.

Measures including a curb on executive pay and a bespoke code of practice are just some of the measures expected to be announced today (Tuesday) following the government’s consultation on corporate governance

Taking aim at an ‘irresponsible minority’ of bosses, the PM has vowed to clean up big business in Britain following a series of high-profile scandals which have fed into growing distrust of the business world and anti-globalisation sentiment in the public at large.

Other measures expected to be announced by the Business Secretary Greg Clark today include making firms obligated to report on diversity and greenhouse gas emissions, forcing businesses to publish pay rations between their chief executive and average employee, and efforts to improve the effectiveness of remuneration committees.

Clark will also reveal plans for greater representation of employee voices on the boards of businesses; however, this will fall some way short of getting regular employees to sit on boards, after May backpedalled on the idea last week.

May said that the measures, set to be recommended by the government in a green paper later today, would ensure that ‘everybody plays by the same rules’.

Making reference to the controversy surrounding the collapse of BHS and the resultant pensions deficit, she added: “We have seen an irresponsible minority of privately-held companies acting carelessly - leaving employees, customers and pension fund beneficiaries to suffer when things go wrong.”

However, the government has already been accused by the shadow business secretary, Clive Lewis, as not going far enough in their recommendations.

Lewis said: “The problems of spiralling executive pay and poor corporate governance have escalated over the last six years while the government sat idle. The prime minister already rowed back on her flagship policy of putting workers on boards.

“Sadly, this green paper looks like offering tokenism rather than a much-needed call to action.

“The real test has to be whether these proposals would have saved jobs and pensions at BHS or prevented the gross mistreatment of staff at Sports Direct, and whether they’ll tackle the scourge of low pay and escalated executive pay. Anything that falls short of doing that is just not good enough.”