Corporate Governance

Jonathan Edwards Excerpts

1st reading: House of Commons
Tuesday 29th November 2016 Commons Chamber

[Greg Clark]

My right hon. Friend is right that good corporate governance can stop corporate failure and the effects of contamination that his commission was set up to investigate. The commission made some valuable recommendations, many of which have been enacted. When he comes to look at the Green Paper, he will see further proposals for how incentive schemes for executives can be better aligned with the long-term interests of the company and made more transparent.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The statement represents a welcome step forward, but if the UK Government are serious about tackling income inequality in companies, they should go a step further and introduce fair pay structures whereby the remuneration of those at the top and bottom are linked. That would be a way of ensuring that the economy works for all.

[Greg Clark]

I do not agree with that approach. It is right to have transparency and right that companies engage with their employees and make the case both to shareholders and to the workforce for the choices that they make. However, given our diverse range of companies and industries, it would be a mistake that would be bound to hamper their success if we, in the Government or in this House, were to specify precisely what people should be paid.