1. Explicitly remove shareholder primacy from the UK system. This should be argued on the basis that it hasn't worked, the shareholder base has changed too much to make the model work for the public (shareholders now primarily split between the City - which is conflicted - and overseas investors), and shareholders do v little in exchange for their rights in comparison to employees. This means rewriting directors' duties - why not just promote the success of the company, as the TUC has suggested? - and the UK Corporate Governance Code.
2. Remove corporate governance from the FRC's remit. This is too big an issue to fall under a financial regulator. There should be a permanent Corporate Governance Committee compromised of representation from managers, employees and investors. And no-one else. No lawyers, no accountants. This committee should oversee the UK Corporate Governance Code and revisions to it.
3. Create a specific companies regulator. This would have the functions of mandating and reviewing disclosures on ESG issues and overseeing complaints from all stakeholders about company behaviour. Perhaps it could also house the UK National Contact Point for OECD complaints?
4. Make worker representation on boards mandatory for all companies. Also institute mechanisms for all companies to share the wealth created with those that actually create it - profit-sharing and employee ownership, yes, but also collective bargaining.
5. Overhaul executive pay: reduce it to salary plus one incentive scheme as a starting position. Initiate a review of evidence relating to the use of performance-related reward for executives, including behavioural evidence. If the evidence is not compelling that performance pay works, cap incentives at much less than 100% of salary or scrap them entirely. Require disclosure of internal pay ratios, with the objective of moving towards binding maximum ratios in future - with the explicit aim of pulling up wages at the bottom and squeezing the pay gap.
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