Written Questions are submitted by MPs or Lords to receive information from a Department.
|12 Jul 2018, 3:49 p.m.||Lord Kennedy of Southwark (Labour - Life peer)||Lord Kennedy of Southwark (Labour - Life peer)|
Question to the HM Treasury
To ask Her Majesty's Government what assessment they have made of the bonuses paid to senior managers of utility companies.
Answer (Lord Bates)
Her Majesty’s Government has conducted no formal assessment of the remuneration packages of senior staff in privately owned utility companies. However, the Government has set out a range of legislative and business-led measures which will improve corporate governance and give workers and investors a stronger voice, including at utility companies.
The Government published last month a draft statutory requirement that introduces a number of new corporate governance reforms. These include a new requirement on UK quoted companies to disclose and explain each year the ratio of their CEO’s total remuneration to the average remuneration of their UK employees. The statutory instrument also obliges very large private companies, including utility companies where they are unquoted, to report each year on how they are ensuring good corporate governance. Subject to Parliamentary approval, the relevant secondary legislation will come into force from the start of 2019.
This will sit alongside steps already being taken by the independent regulators of the utilities sectors to encourage these companies to adopt strong corporate governance arrangements. For example, Ofwat have recently consulted on new measures to improve corporate governance in the water sector, including measures to assess the link between executive remuneration, dividend payments and performance delivery for customers. Although these regulators operate independently of government, government engages with them closely to ensure they are able to carry out their functions effectively.
Additionally, the Government has invited James Wates to lead a business and wider society coalition group to develop corporate governance principles suitable for use by large private companies. These principles are currently being consulted on with a view to finalising them by the end of the year.