Corporate pay and culture faces new government probeComments Off on Corporate pay and culture faces new government probe
Politicians have launched a new probe into Britain’s boardroom culture after damning investigations into working practices at Sports Direct and the collapse of BHS.
The Business, Innovation and Skills Committee’s inquiry into executive pay, the responsibilities of directors and the number of women in Britain’s boardrooms, follows Prime Minister Theresa May’s ambitions to crack down on corporate excess.
Committee chairman Iain Wright said: “We need to look again at the laws that govern business and how they are enforced… Good corporate governance shouldn’t be a hindrance to business.”
The latest scrutiny comes after the furore over BHS’ collapse, and working conditions at Sports Direct’s Shirebrook distribution centre.
MPs concluded that Sir Philip Green sold BHS to a buyer who was “manifestly unsuitable”, and said Sports Direct’s founder Mike Ashley should be held accountable for company failings.
The inquiry also follows a round of shareholder revolts at annual general meetings this year, as investors took umbrage with the exorbitant awards given to top bosses.
May has signalled support for annual binding votes on pay packages, as well as employee representatives on boards.
Institutional investor Legal & General has written to all FTSE 350 chairmen to highlight a series of changes to pay practices that it wants to see adopted.
It has called on remuneration committees to consider retendering contracts for pay consultants — after a revolt by more than 20% of shareholders — and publishing statements on how committees can tackle concerns.