Wednesday, 17 July 2013

Employees in corporate governance

A quick plug for the new Smith Institute report Just Deserts which is being launched tonight. (Can't go as I'm home sick). The strapline should tell you that this is worth a read - Poverty and inequality: can  workplace democracy make a difference?

As always, I skip straight to the corp gov section which, in this case, is well worth a read. Here are the headline recommendations -
• A Corporate Governance Commission must be established as a matter of urgency after the 2015 general election to make recommendations for the reform of company law, with the specific aim of establishing a stakeholder model of governance in the UK, using either the existing unitary board structure or the two-tier structure that is well established in Germany. The commission should be
required to complete its work within 18 months so that legislation can reach the statute book before the 2020 general election.
• Swifter action can be taken in the field of executive pay and remuneration in listed companies, with new requirements imposed on corporations to achieve a higher level of transparency by publishing:
• the ratio of the pay of the highest earner to the pay of the lowest earners in the organisation;
• the number and percentage of employees paid at the national minimum wage;
• the number and percentage of employees paid less than the living wage; and
• the distribution of pay across the whole workforce, broken down by grade and pay level.
• Board-level representation can be effective only if there is a robust structure for employee participation at all levels of the organisation. Works councils, collective bargaining and workers on the board are mutually reinforcing processes. Extending worker participation in strategic decision making must go hand in hand with an effort to rebuild institutions for participation in the workplace.

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