This follows the committee’s inquiries into the corporate collapse of retailer, BHS, and the working practices at Sports Direct and the announcement by Theresa May that the government will be consulting on corporate governance issues this autumn – including her proposals on executive pay and employee representation on company boards.
Iain Wright MP, chair of the BIS Committee, said, “Private enterprise and a respected business community is vital to the UK’s future prosperity and contributes to the funding of our schools, hospitals, and infrastructure. Irresponsible business behaviour and poor corporate governance ill serves workers, but it also tarnishes the reputation of business and undermines public trust in enterprise. We need to look again at the laws that govern business and how they are enforced. Good corporate governance shouldn’t be a hindrance to business; it can contribute to companies’ long-term prosperity and performance as well as showing to the world that a business is transparent, accountable and responsible.”
The inquiry has been backed by the Institute of Directors and the TUC. Simon Walker, Director General of the Institute of Directors, said, “The UK has long been a leader in promoting high standards of governance, with our corporate governance code being copied across the world. But the reputation of corporate Britain has not recovered from the financial crisis, and there are important questions that need to be addressed on issues including transparency, executive pay and board diversity. The Prime Minister has made clear that company boards are in her sights, so directors must fully engage in this debate.”
Frances O’Grady, TUC General Secretary, added, “Poor corporate governance contributes not only to high profile corporate disasters such as BHS, but also to short-termism and excessive executive pay across much of the private sector. This inquiry is important and timely and the TUC welcomes the opportunity to contribute to the Committee’s discussions.”