Put bondholders on boards to limit pay, says Davis
BRITAIN’S new Brexit Secretary believes bondholders should sit on boards to curb executive pay.
David Davis suggested that Prime Minister Theresa May’s plan to have employee representatives on boards might not be enough.
‘I used to believe that, and made the case for it at the Tory conference when I was 18,’ he said. But his experience as a corporate troubleshooter at food ingredients group Tate & Lyle taught him that the existence of employees on continental boards meant the other members held private meetings in advance, where real decisions were made.
Bondholders as lenders ‘tend to pull the trigger’ in difficult company situations, Davis said, referring to the fact that they often call in debts or administrators if they think they cannot be repaid. So their voice would carry more weight over corporate pay than that of shareholders. Before the EU referendum, Davis was writing a book about capitalism, which is due to come out later this year. But it was unclear this weekend whether it would still be published.
In an interview about the book with The Mail on Sunday given before last month’s vote, he was critical of banks, saying: ‘What society gets out of the financial system today is the same as it used to be 30 years ago, but the cost has gone up.’
He said that while his heart backed former Chancellor George Osborne’s National Living Wage, it would accelerate the use of robots to replace workers.
‘If you go to a supermarket checkout, the payback on one of those automated tills was about four years, and it becomes three years as a result of the living wage. It accelerates automation.’
Davis, who studied molecular and computer science at university, said: ‘Automation is de-skilling large elements of the professions.’