UK prime minister Theresa May has warned that reform of corporate governance is on its way with plans for consumer and worker representation on company boards set to be published later this year.
May revealed the imminent arrival of a consultation document while speaking at the Conservative Party conference in Birmingham. Her remarks were welcomed by the chief executive of the Financial Reporting Council (FRC), the UK’s governance watchdog, who said reform was needed to improve the relationship between business and society.
During her speech May also put companies on alert for a fresh crackdown on tax avoidance.
May said: “Too often the people who are supposed to hold big business accountable are drawn from the same, narrow social and professional circles as the executive team.
“And too often the scrutiny they provide is not good enough. A change has got to come.
“So later this year we will publish our plans to have not just consumers represented on company boards, but workers as well.”
Stephen Haddrill, CEO of the FRC, responded with a statement in which he supported May’s desire for “wider stakeholder engagement” and acknowledged there had been a loss of public confidence in big business.
He said: “Tackling important issues such as diversity in boardroom representation and executive pay is in the interests of society and business.
“In particular we need to look at how boards set pay, respond to votes at annual general meetings on remuneration, and align pay and culture.
“We should also look wider at other issues including how directors are held to account in relation to their obligations to all stakeholders.”
Haddrill’s statement made no direct reference to consumers or workers on boards, but he added: “…there has been a loss of confidence in business—particularly big business. If we ignore this, damage will be done to our economy and prosperity.
“There are no simple solutions. We need the right balance of reform of governance requirements and focus on corporate culture to improve the relationship between business, wider stakeholders and society.”
May offered some of her most emphatic statements on tax. She said: “If you’re a tax-dodger, we’re coming after you.
“If you’re an accountant, a financial adviser or a middleman who helps people to avoid what they owe to society, we’re coming after you too.
“An economy that works for everyone is one where everyone plays by the same rules. So, whoever you are—however rich or powerful—you have a duty to pay your tax.
“And we’re going to make sure you do.”