Corporate Governance

Lord Haskel Excerpts

Monday 29th April 2019 Lords Chamber

Asked by

[Lord Haskel]

To ask Her Majesty’s Government what steps they are taking to raise public confidence in, and support for, business and industry through better corporate governance.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, we have reformed our corporate governance framework to make businesses more open and accountable. A revised UK corporate governance code gives employees a stronger voice in the boardroom and new legislation requires companies to report on their executive pay ratios.

[Lord Haskel (Lab)]

My Lords, we are all aware of the declining confidence in companies, particularly those delivering public goods and services, such as Carillion. Care homes are going bust and the probation service is in crisis at the moment. Led by Tomorrow’s Company—I declare an interest—thought has been given as to how we might restore public confidence in the trustworthiness of such companies. The proposal is that the Government should support the use of a British standard for the corporate governance of companies delivering these goods and services, in the same way that British standards enable us to trust public transport and health services.

[Noble Lords]

Question.

[Lord Haskel]

I am confident that British standard 95009 will be published next month. My question to the Minister is this—

[Noble Lords]

Hooray!

[Lord Haskel]

Will the Government insist that companies delivering products and services to the public must satisfy this British standard, and that procurement bodies must also abide by it?

[Lord Henley]

My Lords, I agree with the noble Lord that public trust in companies and their governance is very important. I assure him that, according to the most recent survey, levels of public confidence are increasing rather than decreasing, as he put it. I am also aware of the work being done by the British Standards Institution in developing two new specifications on sustainable investment management and sustainable finance. It is premature to say whether the Government should expect suppliers to comply but we will obviously consider it carefully in due course.