UK: the Companies’ Remuneration Reports Bill - second reading received in the House of Lords

Last Friday the Companies’ Remuneration Reports Bill received its second reading in the House of Lords and now proceeds to the Committee stage. The written record of debate, Hansard, is available here. The proceedings can be watched here but patience is required because the video file begins with a preceding debate concerning dogs which lasts for 1 hour and 6 minutes! The Bill will introduce the following provision in the Companies Act (2006):

430A Annual accounts and report: public quoted companies

(1) Every public quoted company, as defined in sections 4(2), 385(1) and (2), shall publish on the first page of the chairman’s statement, chief executive’s statement, or directors’ report, whichever comes first in the annual accounts and report, the ratio between the total annual remuneration of the highest paid director or executive and the total annual average remuneration of the lowest paid ten per cent of the workforce".

 

The Bill - a Private Members' Bill - was introduced by Lord Gavron (a Labour peer) and during second reading there were contributions from, inter alios, Lords Giddens, Goodhart and Wedderburn of Charlton. All of the speeches are worth reading. Lord De Mauley, the shadow Minister for Business, Enterprise and Regulatory Reform, expressed reservations with the Bill. The Government Minister, Lord Davies of Abersoch, stated (at col. 1732) that the Government had "absolutely no problem with the principle of reporting as outlined in the Bill. Our signpost is that we will take up this cause. Our worry about the Bill is that it will distract from the wider issues".

Earlier in the day on Friday, the Bill was the subject of discussion on the BBC Radio 4 Today programme: click here to listen. Lord Gavron took part as did Miles Templeman from the Institute of Directors.