The government has said it will introduce “better and more transparent” corporate reporting on capital allocations as part of its newly published industrial strategy.
The long-awaited paper also included a pledge to create a new centre of expertise for data ethics, which will advise on the “ethical, safe and innovative uses of data, including AI [artificial intelligence].”
In addition, the government will push ahead with the measures outlined in its corporate governance green paper. The statement on reporting came as part of plans to support “long-term” investment.
The report said the government would continue “to work with industry and regulators to introduce better and more transparent reporting by listed businesses on how their capital allocation decisions affect their productivity and by promoting more long-term investor stewardship.
“We will also take forward commitments announced recently following our corporate governance reform green paper, including measures to better align executive pay with long-term company performance.”
The green paper mapped ways for shareholders to improve their oversight of executive pay, as well spelling out plans for publishing pay ratios. The green paper held back from proposing worker representatives on boards.
On data ethics, the report said: “The UK will take an international leadership role by investing £9m in a new Centre for Data Ethics and Innovation. This world-first advisory body will review the existing governance landscape and advise the government on how we can enable and ensure ethical, safe and innovative uses of data, including AI.
“This will include engaging with industry to explore establishing data trusts to facilitate easy and secure sharing of data. We will consult widely in due course on the detailed remit for this new centre.”
The industrial strategy defines its overall aim as making the UK the world’s most innovative country by 2030. It sets out strategic objectives across artificial intelligence, clean growth, an ageing population and transport.
Business secretary Greg Clark said: “The way we earn and live our lives as workers, citizens and consumers is being transformed by new technologies.
“The UK is well-placed to benefit from this new industrial revolution and we start from a position of significant strength. We have a thriving research and science base and are home to a wide range of innovative sectors, from advanced manufacturing and life sciences, to fintech and creative industries.
“The Industrial Strategy is an unashamedly ambitious vision for the future of our country, laying out how we tackle our productivity challenge, earn our way in the future, and improve living standards across the country.”
There was immediate response to the new strategy. The Pensions and Lifetime Savings Association (PLSA) said the report failed to call for reporting of human capital.
Luke Hildyard, policy lead for stewardship and corporate governance, said: “The focus on better disclosures to investors is especially positive, but requirements to report on capital allocation should include human capital.
“Investment in training and development by the UK’s biggest employers is crucial both to economic productivity and to the long-term success of our companies and the pension funds that invest in them.
“Despite this, companies provide very little information of this nature to investors. For example, just 21% of the FTSE 100 provide data on training and development, and just 9% provide their internal hire rate.
“The PLSA has previously highlighted the low levels of reporting in this area, and provided advice for pension funds on the information they should require from investee companies.”