1 December 2016

Options to strengthen worker and customer voices in the boardroom, reform executive pay and build a stronger corporate governance framework for large, privately-held companies have been put out for consultation.

The Department for Business, Energy and Industrial Strategy (BEIS) is inviting comments on “Corporate governance reform: green paper” which can be found at www.gov.uk.

The consultation asks which types of company need to strengthen stakeholder voices and how best the opinions of workers and customers can be heard in the boardroom.

Business Secretary Greg Clark said: “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.”

The green paper examines ways of increasing shareholder influence over directors’ remuneration, including increasing transparency and simplifying and strengthening long-term incentive plans.

Chris Cummings, Chief Executive of the Investment Association, said: “We welcome the open and consultative nature of this green paper which will allow all stakeholders to offer their views and support the government’s renewed focus on corporate governance to make sure companies are being managed in the long-term interest of shareholders, their customers and employees.”

However, the TUC has accused the Prime Minister of failing to live up to her promises and described the proposals as disappointing.

“We need the voice of elected workers in the boardroom, rather than on advisory panels,” General Secretary Frances O’Grady said, pointing out that a new poll published by the TUC finds that 59% of people support the election of worker representatives onto the boards of large companies.