Equality Trust Submission to FRC on Wates Governance Principles
Large private companies comprise a large and important sector of the UK economy, so we were pleased to make a submission to the FRC's consultation on the Wates Governance Principles. The conclusion of our submission reads as follows:
As James Wates himself notes: “Good business well done is good for society. Private companies are a significant contributor to the UK economy, providing tax revenue and employing millions of people. They have a significant impact on people’s lives, and it is important they are well-governed and transparent about how they operate.”
We agree that this is the case and that is why we advocate that they adopt similar standards to those that we want to see applied to publicly-quoted companies, notably: pay ratio reporting, employees on boards and employees on remuneration committees. These businesses are too important to the UK to be governed under the narrow, ineffective, cosy-club arrangements that prevail amongst listed companies, arrangements that have brought us (variously) excessive executive rewards mirrored by poverty pay for workers, scandals like Carillion and the slack and conducive environment that permitted the global financial crash of 2007/8.
Large private companies have a great opportunity here to be standard-bearers for a new and fairer way of doing business. At the heart of this new model should be governance arrangements that actively promote greater economic democracy and a narrowing of the income and wealth gap in the privately-owned company sector that will, in turn, help reduce inequality and thereby improve our society as a whole.
The full submission can be read here. Please do share it widely via all your networks. Thank you very much.
The Equality Trust