5 April 2017
Commenting the business select committee report on corporate governance reform published today (Wednesday), which sets out ideas for a robust programme of reform on areas like executive pay, board diversity and worker representation, TUC General Secretary Frances O’Grady said:
“British people are fed up with the bad behaviour of big business. Workers are getting a raw deal, and our economy is harmed by short-term thinking in the board room. Reform is badly needed, and the government should take up many of the excellent ideas in this report.
“We welcome the committee’s recognition of the value of workers on boards, bringing a broader boardroom perspective and strengthening long-term focus. But it’s unlikely to become ‘the norm’, as the committee hopes, unless there is a legal requirement. We encourage the Prime Minister to stick with her original promise to require companies to put workers on boards.
“The committee is absolutely right to call for employee representation on remuneration committees to be in the Corporate Governance Code. And we back the committee’s call for a much simpler pay structures and scrapping the LTIP system for boardroom pay incentives, which has failed to link pay to long term company objectives.
“The TUC strongly backs the proposal to give the Financial Reporting Council (FRC) the power to take legal action when companies fail in their duties to workers and stakeholders. This would make a big difference in holding firms to account for their failures. Representation on the FRC’s board should also be expanded to include key stakeholder groups, including workers.”
Notes to Editors:
- All TUC press releases can be found at tuc.org.uk/media
- TUC Press Office on Twitter: @tucnews
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