It’s the Conservative party conference this week and City types are agog to hear whether Theresa May will give more details about her pledge to reform capitalism. In July, in what was meant to be one of many campaign speeches for the Tory leadership, May attacked runaway executive pay and said she would put workers and consumers on boards to make companies more accountable to society. Later that day, Andrea Leadsom pulled out of the race and May became prime minister, with her remarks echoing in the ears of fund managers and bosses.
City lobbyists are hoping for vague proposals that they can influence during consultation, but May seems committed to worker representation. Opponents say it will upset the balance of boardrooms because directors are meant to be responsible for the whole company and not for a particular group. They suggest instead giving a board member responsibility for communicating with workers.
Others, such as Hermes Investment Management, think such objections are surmountable and that a worker on the board is a good idea. First Group, the bus and train operator, already has an employee board member and Mike Ashley has promised one at Sports Direct, hitherto a pariah of corporate governance. The business establishment may have to lump it.
(S. Farrell, www.theguardian.com, 02.10.2016)