HM Treasury has published a speech that Paul Myners (Financial Services Secretary) gave at the ICGN Conference on Corporate Governance. The speech is entitled Check against delivery.
In his speech Lord Myners discusses the importance of good corporate governance. He also mentions recent Government action in this area including:
- As announced in the Budget, as part of the development of the Stewardship Code, the Government is considering whether the existing institutional investor voting disclosure regime should remain voluntary, or whether it should become mandatory and the form that this should take.
- As part of the Financial Services Bill, the Government has also published draft regulations to require enhanced disclosure on remuneration by the largest UK and overseas banks operating in the UK.
- As announced in the Budget, the Government will consult on possible changes to facilitate the approval by shareholders of executive remuneration in the financial services sector.
- As announced in the Budget, the Government will establish a Treasury led working party to clarify the benefits of the possible dematerialisation of paper share certificates.
On the issue of remuneration Lord Myners makes four additional points:
- Excessive executive pay did not cause the global financial crisis.
- Government intervention in market mechanisms that determine pay can only go so far.
- Directors and the shareholders who elect them are responsible for remuneration decisions.
- Shareholders are not evidencing sufficient engagement or challenge - they have and continue to let some executives get away with too much and are failing to demand of CEOs and remuneration committees that they find better ways of managing senior executives than simply throwing more money at them.