The Equality Trust has responded to the Business, Energy and Industrial Strategy Select Committee’s inquiry on corporate governance. Our full response can be found here, key points include:

• Executive pay has risen far beyond merit, partly due to a collapse of social norms.
• Social norms can be restored by anchoring executive pay to that of the average employee through monitoring of pay ratios.
• The Government should legislate to require large and medium sized companies to publish the pay ratio between the total remuneration of their executive director and that of their median employee.
• Large and medium sized companies should also be required to publish a justification of their pay ratio in their annual reports, as well as providing an account of any changes in the pay ratio.
• Employers should also be encouraged to publish the pay ratio between the total remuneration of their executive director and their lowest paid employee.
• Employee representatives on boards can improve both the equity and efficiency of an organisation.
• The Government should require large and medium sized companies to have employee representatives comprising a third of the members of their boards.

Notes to editors

For further comments or to arrange an interview, contact info@equalitytrust.org.uk