Workers, suppliers and pension funds must be given real voice in reformed corporate governance regime says PLSA
28 February 2018
The Pensions and Lifetime Savings Association (PLSA) today called for workers, pension funds and other stakeholders to be given real powers as part of the UK’s new corporate governance regime.
Responding to the Financial Reporting Councils’ consultation on changes to the corporate governance code, the PLSA welcomed new proposals to introduce greater stakeholder voice into boardroom decision-making by requiring firms to introduce worker directors, stakeholder committees or non-executive directors with designated responsibility for stakeholder issues.
Luke Hildyard, Policy Lead for Stewardship and Corporate Governance, at the Pensions and Lifetime Savings Association, said:
“Companies need to account for their employment models and working practices far more effectively than is currently the case. Just 7% of FTSE 100 companies report on their use of agency workers, while only 21% provide data on training and development*.
“The proposed new measures will help in this respect, and its good news that companies have been allowed the flexibility to choose which option works best for them. However, the authority and accountability of the new corporate governance regime needs clarification and there is a risk that these new measures will represent an ineffective gesture unless the different options for increasing stakeholder voice include key rights and responsibilities.
“For example, worker directors or non-executives with responsibility for stakeholder issues should have to answer to the workers and other stakeholders. Stakeholder committees should be able to provide unvarnished criticism of boards, when warranted.”
The PLSA’s response (click here) also:
- Warns that the proposed new FRC guidance does little to discourage excessive executive pay awards;
- Welcomes the focus on diversity at senior levels of leading companies;
- Recommends that the Stewardship Code should ask investors to outline how they consider the environmental and social impact of their investments.
NOTES TO EDITORS
Lee Blackwell, Head of Media and PR, Pensions and Lifetime Savings Association
T: 020 7601 1726, M: 07713 073023, E: [email protected]
Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1748, M: 07901 007713, E: [email protected]
Eleanor Carric, PR Manager, Pensions and Lifetime Savings Association
T: 020 7601 1718, M: 07825 171 446, E: [email protected]
* = Figures sourced from Hidden Talent - published in partnership with Lancaster University– November 2017 (click here)
ABOUT THE PENSIONS AND LIFETIME SAVINGS ASSOCIATION
We’re the Pensions and Lifetime Savings Association; the national association with a ninety year history of helping pension professionals run better pension schemes. Our members include over 1,300 pension schemes with 20 million members and £1 trillion in assets, and over 400 businesses. They make us the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels.
Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.