This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/business/2016/sep/15/select-committee-to-launch-inquiry-into-corporate-excess

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
MPs to launch inquiry into corporate excess MPs to launch inquiry into corporate excess
(about 17 hours later)
Theresa May’s clampdown on corporate excess is to be taken up by a powerful committee of MPs which will announce a public inquiry into spiralling executive pay and the composition of boardrooms. Theresa May’s clampdown on corporate excess is to be taken up by a powerful committee of MPs in a public inquiry into spiralling executive pay and the composition of boardrooms.
The Business, Innovation and Skills select committee, chaired my MP Iain Wright, will build on its work into the collapse of BHS and the working conditions at retailer Sports Direct with wider scrutiny of corporate Britain. The Business, Innovation and Skills (BIS) select committee, chaired by MP Iain Wright, will build on its work into the collapse of BHS and the working conditions at retailer Sports Direct with wider scrutiny of corporate Britain.
It is a theme that was raised by May in her bid for the Conservative leadership after the EU referendum and one that she is expected to continue in her role as prime minister. Announcing the inquiry, Wright said: “Irresponsible business behaviour and poor corporate governance certainly act against the interests of workers, but they also act as a brake on long-term prosperity and profitability in companies. We need to look again at the laws that govern business and how they are enforced.
May had outlined her agenda for corporate Britain in July just minutes before her rival, Andrea Leadsom, pulled out of the leadership contest. She pushed for shareholder votes on corporate pay to be not just advisory but binding, and she has raised the idea of consumers and workers being represented on company boards. “We are also keen to explore the issue of ever growing pay increases to executives, especially when there often seems to be very little connection with company performance or any pay rises to the vast majority of employees.”
These ideas seem likely to be considered by Wright and members of the BIS committee, as they take evidence from shareholders, employers’ bodies and campaigners for boardroom change. Among the themes that could be examined would be the role of shareholders and whether the government should introduce new rules. The wide-ranging investigation will also consider the possibility of worker representation on company boards and remuneration committees, as well as the barriers to women rising to the top levels of management.
Boardroom excess and corporate governance were themes raised by May in her bid for the Conservative leadership after the EU referendum and one that she is expected to continue in her role as prime minister.
May had outlined her agenda for corporate Britain in July just minutes before her rival, Andrea Leadsom, pulled out of the leadership contest. She pushed for shareholder votes on corporate pay to be not just advisory but binding, and she raised the idea of consumers and workers being represented on company boards.
The BIS committee will take evidence from shareholders, employers’ bodies and campaigners for boardroom change.
MPs will consider whether the long-term performance of companies should be taken into account when executive pay deals are reached, and whether or not recent shareholder revolts suggest investors need a greater role.
Frances O’Grady, general secretary of the TUC, said: “Poor corporate governance contributes not only to high profile corporate disasters such as BHS, but also to short-termism and excessive executive pay across much of the private sector. This inquiry is important and timely and the TUC welcomes the opportunity to contribute to the committee’s discussions.”
The BIS committee has conducted a number of high-profile investigations in recent months, including a 60-page report into the collapse of retailer BHS – along with the work and pensions committee – and a 33-page report into working conditions at Sports Direct.The BIS committee has conducted a number of high-profile investigations in recent months, including a 60-page report into the collapse of retailer BHS – along with the work and pensions committee – and a 33-page report into working conditions at Sports Direct.
The latest investigation is likely to begin next month, once the annual political party conference season has been completed. The deadline for submitting written evidence for the inquiry on pay and corporate governance is 26 October.
Simon Walker, director general of the Institute of Directors, said: “The reputation of corporate Britain has not recovered from the financial crisis, and there are important questions that need to be addressed on issues including transparency, executive pay and board diversity. The prime minister has made clear that company boards are in her sights, so directors must fully engage in this debate.”