Equality Trust Response to BEIS Select Committee Consultation on Corporate Governance
Tuesday, 25 October, 2016
The Business, Energy and Industrial Strategy Select Committee is conducting an inquiry on corporate governance, focussing on executive pay, directors' duties, and the composition of boardrooms, including worker representation and gender balance in executive positions.
Responding to the consultation, Executive Director of The Equality Trust, Dr Wanda Wyporska, said:
"The Equality Trust welcomes the select committee's call for submissions on corporate governance. I think we can all agree that the recent revelations about shocking corporate greed and excess have put the role of business firmly in the public eye.
"In too many cases our businesses are run by, and for, a tiny elite at the top of the organisation. Executives are seen as talent to be retained with ludicrous bonuses, while ordinary workers are treated as a cost to be reduced. Even worse, many corporations fail miserably to tap into the years of knowledge and expertise found among their staff. The result is a culture of complacency and mistrust, with short-term thinking and instability.
"We need to learn from the thriving, robust businesses that put workers at the heart of decision making. To provide scrutiny and expertise from the 'shop-floor' we recommend the Government requires company boards to have a third of workers. To help tackle the ridiculous pay gaps between bosses and employees, medium and large companies should be required to publish these pay ratios, and explain them.
"Businesses are successful when they recognise that success is built by all employees. Many do, and provide huge value to shareholders, management and employees. If we want a modern economy that works for us all, we need to build on these companies, and consign poverty-pay, eye-watering inequality, and workhouse practices to history."