David Miliband says: Reform the boardroom to cut top pay

By Alex Smith / @alexsmith1982

Writing on his website today and speaking at an event in Cardiff, David Miliband said that as Labour leader he would seek to rebalance the distribution of power, as well as income, in the workplace by tackling the make-up of corporate boards.

At the Fabian hustings last night, Miliband spoke about markets’ potential for wealth creation, but also their potential for destruction unless checked by democracy. Today, he’s written on his blog:

“The average ratio of boss-to-worker pay among FTSE 100 companies has reached 66:1 – with executive pay and bonuses far outstripping firm performance in the 1990s and 2000s. The impact of this on pay inequality was always a moral concern, but its contribution to the credit crunch was economically catastrophic.

“I have supported calls for a High Pay Commission to investigate what’s been driving these trends. But we need a solution, not just a process. And I think an important part of that solution lies in spreading power, transparency and accountability within companies. Decisions that are currently taken by an elite in the shadows need to be opened up and brought out into the light.”

To these ends, Miliband is also calling for democratically accountable employees to be represented on firms’ remuneration committees, and limiting the number of boards any individual can sit on.

Compass have long called for a High Pay Commission, and I signed a letter in the Guardian last August to express my support for fairer pay studies. Ed Miliband also signalled his support for the establishment of a commission last week.

David Miliband’s campaign also said today that 48,000 people have visited his website in the month since he launched his campaign.