Friday, 4 November 2011

UK: directors' remuneration, shareholders and women on boards

The debate regarding the remuneration of the directors of the largest listed companies continued this week with a question to the Prime Minister in Parliament on Wednesday, as part of Prime Minister's Questions. The Prime Minister was asked whether he was "committed to the transfer of power over pay from the boardroom to the shareholders". He replied:

I do want to see that happen. The answer to this is much more transparency about the levels of pay, much more accountability, and strengthening the hand of shareholders. There is something else we need to do, which is to make sure that non-executive directors on boards are not the usual sort of rotating list of men patting each other’s backs and increasing the level of remuneration. I want to see more women in Britain’s boardrooms, which I think would have a thoroughly good influence."

The record of debate, Hansard, is available here (see col. 922). The Prime Minster's Spokesman, in a press briefing that followed PMQs on Wednesday, was asked whether there was a link between greater female representation on boards and lower remuneration - see here - to which this response was provided:

... in Prime Minister's Questions the Prime Minster had made [a] more general point about reform of Britain’s boardrooms ... the Prime Minster was essentially making the point that as the same people were appearing in different boardrooms over and over again, we could do with some new blood and seeing that in the past most boardrooms have been filled with men, bringing in more women would be a good thing."

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