After BHS pension scandal, ministers launch crackdown on fat cat bosses
MINISTERS will today unveil plans for a crackdown on corporate governance rules designed to prevent a repeat of the BHS pensions scandal.
Business Secretary Greg Clark will launch a series of boardroom reforms aimed at ‘better protecting employees, customers and pension fund recipients from mismanagement in large private companies’.
Government sources said ministers wanted to strengthen ‘the voice and role of pension fund beneficiaries’ during takeover talks. However, details of how any new regime might work remained vague ahead of a consultation to be launched today.
The move is part of a wider review of standards in business, including a crackdown on fat cat pay.
Speaking last night, Theresa May said the role of business in the economy should be ‘celebrated and supported’. But she added: ‘We have, however, seen an irresponsible minority of privately-held companies acting carelessly – leaving employees, customers and pension fund beneficiaries to suffer when things go wrong.
‘So we will explore ways to improve good governance across big business so that eve- rybody plays by the same rules and we create an economy that works for everyone, not just the privileged few.’
The move on pensions will be seen as a response to the situation at BHS, which went bust in June with a pensions deficit of £571million, just a year after it was sold by Sir Philip Green for £1. The pension fund’s trustees were said to have opposed the sale, warning it would be ‘materially detrimental’, but were unable to halt the deal.
Today’s move is part of longawaited government proposals designed to improve public confidence in big business.
Ministers have watered down plans to require firms to put workers on boards. But Mrs May will press ahead with the idea of forcing companies to put employees on pay scrutiny committees.
Business leaders would also have to publish pay ratios between executives and staff in a bid to curb excessive salaries and bonuses at the top.
Today’s package also includes giving shareholders the power to veto the pay deals of business leaders in an annual binding vote.
‘Irresponsible minority’