Staff will be given voice on their company’s board

But critics accuse PM of breaking promise to workers

ORDINARY workers will get a voice on executive boards in a crackdown on corporate excess, ministers will announce today.

But Theresa May was last night accused of watering down her original plans, having promised that staff would actually get to sit on company boards.

The Prime Minister told the Tory conference last October she would force companies to accept workers’ representatives.

However, firms will now merely have to show they have listened to employees’ concerns, either by assigning a non-executive director to represent staff, or creating a workers’ advisory council.

Mrs May’s pledge last year to give shareholders more frequent votes on executive pay was also dropped.

Instead, Business Secretary Greg Clark will unveil plans to force all listed firms to give the pay ratio between bosses and staff – and justify the difference.

Top firms whose shareholders have rebelled over executive pay will also be named and shamed in a new public register.

The Prime Minister said at the weekend that fat-cat bosses were undermining trust in big business and were the ‘unacceptable face of capitalism’ – as she insisted her plans were a huge step forward.

But last night, critics accused her of diluting her proposals.

Liberal Democrat leader Sir Vince Cable dismissed the Government’s approach as ‘strong on rhetoric, weak on action’.

And Len McCluskey, leader of the Unite union, said: ‘Once again the big business lobby has brought the Tory party to heel.’

Mr Clark is expected to say: ‘Today’s reforms will ensure our largest companies are more transparent and accountable to their employees and shareholders.’

For the first time, 900 listed companies will have to publish the pay ratios between their chief executive’s salary and the average earnings of their British workers.

Ministers will also publish the world’s first public register of listed companies that have faced objections to executive annual pay packages from at least a fifth of their investors.

In the coming months, the Government will introduce laws to require all companies of a significant size to publicly explain how their directors take employees’ and shareholders’ interests into account. Mr Clark said he would ask the Financial Reporting Council, which sets standards of governance through the UK Corporate Governance Code, to introduce a requirement to ensure workers’ voices are heard.

Under the code’s ‘comply or explain’ rules, firms would have to either assign a non-executive director to represent employees, create an employee advisory council or nominate a director from the workforce.

Paul Drechsler, president of the Confederation of British Industry, said: ‘The unacceptable behaviour of a few firms does not reflect the high standards and responsible behaviour of the vast majority of companies. If pay ratios include meaningful context they could prove a useful addition to the debate about executive pay.

‘Providing shareholders with a “say on pay” has been an effective tool and a public register will help to shine a light on the small minority of cases that warrant greater attention.’

But Mr McCluskey said: ‘Too many at the top enjoy eye-wateringly high salaries and rewards like gold-plated pensions while the workers who have helped make them so rich struggle more and more to make ends meet.

‘Something must be done to bring some sanity and justice to wages. What is being proposed will not do that.’

TUC general secretary Frances O’Grady said: ‘This is a far cry from Theresa May’s promise to crack down on corporate excess. It’s a feeble proposal, spelling business as usual for boardrooms across Britain.

‘The Prime Minister’s pledge to put workers on company boards has been watered down beyond recognition. This amounts to little more than a box-ticking exercise.’

Labour business spokesman Rebecca Long-Bailey said: ‘These proposals are just more crony capitalism from the Tories, who once again prop up the rigged system for the few at the expense of the many.

‘The Tory plan is a fraud, watering down an original promise to increase workers’ voice to a lone representative on the board of directors or a separate employee advisory council.

‘Each of these will be easily outvoted or ignored.’

‘Bring sanity and justice to wages’