Brexit means Brexit, and we’re going to make a success of it,” doesn’t sound like the rallying call of a quiet “Remain” supporter, but Theresa May, who became Tory Prime Minister on Wednesday after her only remaining opponent Andrea Leadsom dropped out of the race, has repeated it over and over in interviews.
All the more odd then, that in the first speech inaugurating her national campaign in Birmingham on Monday 11 July, a national campaign that was over almost before it started, she should be touting German-style governance reforms. But that is what happened.
She was tough on business from the start; an unusual position for a Tory MP, never mind PM. Though it should be noted that she was not always thus, working against former business secretary Vince Cable’s more draconian executive pay restraints. However, business first drew fire from her because of their reaction to the Brexit vote, which was “not to plan for departure but criticise the result and complain about the electorate.”
?
“That means cutting out all the political platitudes about the stakeholders’ society and doing something radical.”
Theresa May, former Home Secretary, new Prime Minister
,
The speech set out four areas of reforming the economy, which she said needed to change so that: more people could share in its success; people could take control of their own lives; people could be given more opportunity; and so she could be tough on irresponsible behaviour in big business. She vowed to switch from the focus on public sector reform in the United Kingdom to economic reform, focusing among other things on better energy strategy, better research and development strategy and a proper industrial strategy. “That means cutting out all the political platitudes about the stakeholders’ society and doing something radical,” she said. Noting the disastrous takeover of Cadbury—a formerly Birmingham-based company—by Kraft, and the near takeover of AstraZeneca by Pfizer, she told her audience that transient shareholders are not the only people affected when firms are taken over or closed; stakeholders are, too. She vowed, without being protectionist, to step in when situations like the AstraZeneca takeover came up again.
She also called for a crackdown on “individual and corporate tax avoidance and evasion.” And went on to say: “And it doesn’t matter to me whether you’re Amazon, Google, or Starbucks, you have a duty to put something back, you have a debt to your fellow citizens, and you have a responsibility to pay your taxes.”
Then she moved to yet more specific governance reforms. “I want to see more transparency, including the full disclosure of bonus targets and the publication of pay multiple data; that is the ratio between the CEO’s pay and the average company workers’ pay. And I want to simplify the way bonuses are paid so that the boss’s incentives are better aligned with the long-term interests of the company and its shareholders.” After leading for a while, pay disclosure in the United Kingdom now lags behind many countries in Europe, and behind the United States. The United States, in addition, is the only other country apart from India, where the CEO-to-worker pay ratio is law. At least, law at the moment, since the Republican Party is seeking to dismantle the law before it even comes into force.
She went further on pay, vowing to make the vote on executive remuneration in U.K. companies a binding one—another Eurocentric idea. Finally, she focused in on that EU-style board reform noted earlier, so that she could make bosses more accountable to shareholders and other “outsiders.” First, she criticised the make-up of current boards: “In practice they’re drawn from the same narrow social and professional circles as the executive team and, as we’ve seen time and time again, the scrutiny they provide is just not good enough.” She stated that she would “change the system” and that this would mean “not just consumers represented on company boards, but employees as well.”
“Brexit means Brexit and we’re going to make a success of it.”
Theresa May, former Home Secretary, new Prime Minister
This last is not a new idea, even in the United Kingdom, where Trades Unions have been calling for similar reforms for many years. Even more ironically, many of these reforms are part of the revised EU Shareholder Rights Directive which will not now, of course, apply to a United Kingdom that has Brexited.
Continue the conversation at Compliance Week Europe: 7-8 November at the Crowne Plaza Brussels. Join us as we look at changes in global anti-corruption regulations, slave labour risks in your supply chain, and how to detect fraud, to name just a few topics. Learn more
No comments yet