Business: Ethical Values

Lord Young of Norwood Green Excerpts

Wednesday 14th December 2011 Lords Chamber

[Baroness Wilcox]

In response to my noble friend Lord Phillips of Sudbury, the Government agree that principles-based regulation will be an appropriate approach in many cases. There are existing examples of principles-based regulation in a variety of areas, as I am sure he well knows, such as the UK Corporate Governance Code, which contains broad principles against which listed companies are required to report. However, we will continue to monitor this and I will continue to talk to him about it.

[Lord Young of Norwood Green]

My Lords, does the Minister agree that the high executive pay which the public at large find so objectionable is only one symptom of the real illness, which is the broken relationship between shareholders and managers? How are the Government going to repair this so that the values of shareholders are reflected in the decisions of management, including perhaps having an employee representative on remuneration committees?

[Baroness Wilcox]

The independent Kay review will be looking at these things, which we have previously discussed and debated. I do not think any of us like to see the distance between remunerations growing wider and wider. There is no doubt that the Government are following this up.