Prime Minister Theresa May has said that a new range of measures to be published by her government this week will tackle the "unacceptable face of capitalism" shown by a minority of firms.
Writing in the Mail on Sunday, the Prime Minister confirmed a tranche of new rules which will aim to rein in the behaviour of "a small minority of executives narrowly put their own short-term interests first."
As reported earlier this week, the government's proposals will include a register which names and shames companies where at least one fifth of shareholders rebel against pay packages. Such a list could include big names, given recent shareholder revolts at Burberry over Christopher Bailey's pay and among Morrisons shareholders.
The government will also push for representation of workers on executive boards, but will allow companies to decide on their own method. May said that "we will set an expectation that they should have in place either an employee advisory panel, or a dedicated board member, or an employee representative on their board".
The Prime Minister threatened taking "further steps" if standards were not improved. She said:
And this is not the end of the road. We will monitor closely how business reacts to these measures, and the others that we will announce later this week.
If we do not see sufficient progress, we reserve the right to take further steps.
These reforms are good for business and good for workers – because everyone has an interest in firms being incentivised to take the right long-term decisions.
The move marks a return to May's pledge to put more workers on boards and improve corporate governance when she became Prime Minister last year.