Richard Lambert of the CBI warned the obsession with creating short-term shareholder value through unnecessary mergers, high-risk trading activities and excessive executive remuneration had eroded taxpayers’ trust in the private sector.
In a speech, Lambert said: “Public trust in business matters to all companies, including those with the most impeccable records. Reputation loss is contagious and there is plenty of evidence the banking sector’s troubles are affecting public perceptions of business more generally.”
Lambert singled out soaring pay levels in the City for particular opprobrium. Remarking that FTSE 100 bosses earned 81 times the average salary for full-time workers in 2009 compared with 47 times just a decade earlier, he said chief executives risked being “treated as aliens” by politicians and the public because their lifestyles were so out of kilter with those of most people.
In a swipe at Lord Mandelson, Lambert added there was “not much point” in trying to lecture overseas shareholders on hostile takeovers.