Last month, the Business, Innovation and Skills House of Commons Select Committee launched a new inquiry into corporate governance. The inquiry will focus on executive pay, directors’ duties and the compositions of boards (including worker and other stakeholder representation and diversity of members).
The Committee is asking for submissions on:
- Whether company law is sufficiently clear on the role of directors and non-executive directors
- Whether companies should face additional duties to promote greater transparency
- Whether there is an effective voice and challenge to boardroom decisions
- Whether executive pay should take account of companies’ long-term performance and whether it should reflect the value added by executives relative to junior employees
- What more should be done to increase the number of women in executive positions on boards
- Proposals for worker representation on boards and remuneration committees
The Chair of the Committee, Iain Wright MP, has said that, “ Irresponsible business behaviour and poor corporate governance ill serves workers, but it also tarnishes the reputation of business and undermines public trust in enterprise. We need to look again at the laws that govern business and how they are enforced. Good corporate governance shouldn’t be a hindrance to business; it can contribute to companies’ long-term prosperity and performance as well as showing to the world that a business is transparent, accountable and responsible.”
Further details of the Inquiry and a link to make written submissions by 26 October 2016 are here .