Companies: Executive Remuneration
Debate between Baroness Wilcox and Lord Monks
Lord Monks
My Lords, in view of the Government’s confidence that shareholders will be able, under these new arrangements, to curb inflation in boardrooms, which has been rampant, are the Government prepared to revisit quickly the issue of representations on remuneration committees by outside interests, including employees, especially in the light of the successful experience of this in neighbouring countries across the North Sea?
Baroness Wilcox
I have lived in the European Union and worked in companies there that have very different methods from ours. One of the things that I found difficult was that very often when one had a range of employees on the board, the board’s decisions would be taken outside the boardroom and what happened inside the boardroom was rubber-stamping. We certainly do not want to see that in this country. However, we are looking at whatever we can. I will reinforce the point, if I may, that UK employees in large companies already have the right to request that their employers consult them through information and consultation arrangements, and we would encourage them to use those arrangements. More than that, I would encourage the union leaders to encourage employee members to use them—they are available to them—rather than necessarily taking them down the path of a more extravagant gesture.
Corporate Governance
Debate between Baroness Wilcox and Lord Monks(12 years, 4 months ago)
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Baroness Wilcox
The implementation of the Davies report is going ahead and things are improving, but we want to see what results can be achieved through a voluntary approach, and we are taking a very close interest in how much progress is being made. We want to encourage talent, but we want to avoid tokenism. I think that 89 per cent of the women whom the noble Lord, Lord Davies, spoke to said that they were not in favour of quotas, so we are trying to avoid getting to that stage if we can. There is no one-size-fits-all answer—companies need to be flexible in their operations. I should like to think that the women who are chosen to go on those boards are chosen because they are the right people for the job.
Lord Monks
My Lords, does the noble Baroness accept that there are many lessons to be learnt from our neighbours across the North Sea in terms of rebalancing the economy, which is an objective of all of us? It seems to me that the Government have not yet accepted that one component of the success of these economies is that workers and other stakeholders have an influence at board level. What plans do the Government have to move in the direction of our successful North Sea neighbours?
Baroness Wilcox
So why do we not let employees have a say on pay? Some have said that remuneration committee membership as a whole—
Baroness Wilcox
On boards and pay, I shall refer back to my notes because we have three reviews going on at the moment. There are no noes on anything. At the moment we are keen to listen to everybody’s views and to look at progress anywhere else in the world. The UK has a strong corporate governance framework and we are committed to strengthening it further, as we should do. As it happens, this country has a good reputation in the world for running boards, although of course we will have to wait to see what Professor Kay says in his review.