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Umunna wants more active shareholders

January 12, 2012 9:03 am

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In a speech this morning, shadow business secretary Chuka Umunna will call for a greater role for shareholders within business – and remuneration committees in particular. He will say:

“I believe in shareholders’ democracy but democracy is about more than voting. If we are to empower shareholders, they need information provided through greater transparency of boardroom pay – as well as the means to mobilise and become more active in the running of their companies.”

The speech will also cover Labour’s backing for the proposals of the High Pay Commission – something which Ed Miliband did earlier this week. In particular, he will be focusing on the need for greater scrutiny on the role of remuneration consultants and will announce that Labour is looking at proposals to empower shareholders by moving towards a system where nomination committees are not composed of board members but of the four or five biggest shareholders in the company along with the non-executive chair of the board – a system already used in Sweden.

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  • Anonymous

    Ah is that not what Unions do they  demand wages in comparison to what directors get, how about  wage and bonus increases for directors, people at the bottom should get 20% / 30% of all rises above inflation, Bankers are getting massive bonus while the sectaries and people on the shop floor are paid just over the min wage, Banks are some of the worse payers for front line staff.

    The simple fact of the matter is of course who would be on these wage committees, if they voted against wages how do you protect these people from the sack, ah yes tribunals yes which will not get your job back and normally pay out one year of your wages.

    Wage increases should be tied to directors wages. and of course bonus payments as they are sometimes used as wages increases.

    We have a black list in the building trade, we would have a black list about employing people on committees.

  • Anonymous

    Most shares in private companies are held by corporate bodies and institutions NOT by individuals: corporate investors are pretty indifferent as far as the conduct of company directors goes as long as the shares pay a decent dividend. If Umunna thinks that groups of  individual shareholders are likely to ever find themselves in a position to dictate company policy about ANYTHING he needs his bumps feeling; hedge funds and pension funds and similar commercial investors ALWAYS call the shots. Sad but true and green lit by New Labour.

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