UK govt plans on corporate governance slammed as 'feeble'

The UK government was on Tuesday accused of “bottling” a major shakeup of corporate governance after it revealed watered-down proposals for curbing excessive boardroom pay and workers' representation.

Under the government's planned reforms due to take effect next June, around 900 listed companies will have to annually publish and “justify” the pay ratio between their chief executives and average worker.

Under the code’s “comply or explain” basis, firms would have to either assign a non-executive director to represent employees; create an employee advisory council or nominate a director from the workforce.

Trades Union Congress general secretary Frances O'Grady said the government's proposals were “feeble”.

“Just a year ago the prime minister repeatedly promised fundamental reform of business. And that’s because there was real public concern about boardroom greed, about tax avoidance, and exploitative works practices at the likes of Sports Direct. This response, I’m afraid, is feeble,” she told the BBC.

“I’m afraid the government has bottled it in the face of business lobbying. And that doesn’t bode well for really tackling some of these big problems, like greed at the top, and what’s happening to everybody else’s pay.”

“I have to say, if the government had shown an ounce of the enthusiasm for capping top pay that it has shown for capping the pay of firefighters, nurses and teachers, we would probably be in a very different place.”