* Excessive executive pay one of PM May's anti-elitism drive
* May being careful not to upset businesses ahead of Brexit
* Growing inequality drove many Britons to vote to quit EU
(Adds Clark comment, BCC)
By Elizabeth Piper and William James
LONDON, Nov 29 Britain began consultations on
encouraging better corporate behaviour and curbing excessive
executive pay on Tuesday, part of Prime Minister Theresa May's
campaign to help those who voted for Brexit in protest at "out
of touch" elites.
May is walking a fine line - not wanting to attack business
at a time when she needs companies' support to prepare for
Brexit but also trying to keep on board voters who want to leave
the European Union and are frustrated with growing inequality.
Taking aim at high executive pay, company boards and the
behaviour of large privately-held businesses, her government
will ask for opinions on questions such as: Should a new pay
ratio reporting requirement be introduced?
But among dozens of proposals, May's plans to have workers
represented on boards have been watered down, with business
minister Greg Clark saying the government would not "overturn"
Britain's successful system of having unitary boards.
In a statement, the Conservative government said it wanted
to stop "an irresponsible minority of privately-held companies
acting carelessly - leaving employees, customers and pension
fund beneficiaries to suffer when things go wrong".
"Ordinary working people, who work hard for their living
deserve to have confidence that businesses act responsibly and
fairly," Clark told parliament on Wednesday.
"There is no conflict between good corporate governance and
profitability," he said, describing May's government as
"unashamedly pro-business" to ease concerns in some companies
that their businesses may be undermined by the reforms.
In a speech to her Conservative Party last month, May struck
fear in some business leaders when she announced that "a change
has got to come" because the "actions of the few tar the
reputations of the many".
The director general of the British Chambers of Commerce, a
leading business lobby group, welcomed the proposals but warned
May that "heavy-handed regulation could reduce investment or
create significant costs for firms".
"Reforms need to be proportionate, and businesses will want
reassurances from government that any changes resulting from
these proposals will not create additional, costly regulatory
burdens for medium-sized and smaller companies," Adam Marshall
said in a statement.
Clark, the business minister, reassured some businesses by
saying the government did not want to impose regulation, but
rather to use non-legislative standards for companies to make
sure that they are held to a "high standard".
Although May has not named any companies, she is clear that
she wants to avoid a repeat of the demise of the BHS department
store, which saw the loss of 11,000 jobs and a huge hole in its
pension fund that could affect 20,000 pensioners.
The government's statement said it would look at ways to
ensure that employees, customers and other stakeholders are
better represented in the boardroom and that executive pay
packages reflect company performance.
The proposals will include a demand that the largest private
firms comply with "a bespoke code of practice" or explain in
their annual accounts why they have not done so, and make
privately-held businesses report more consistently on diversity,
greenhouse gas emissions and social and community issues.
The proposals will be discussed by a wide range of
interested parties before a White Paper is published setting out
the ideas for future legislation. This may also be consulted on
before a formal bill is presented to parliament.
While describing the proposals as "a big change", Clark, who
will deliver the Green Paper to parliament, said the government
would not aim to "overturn" the tradition of company directors
not necessarily being the delegates of certain groups.
Saying companies could have workers represented on boards,
he added: "It is available for companies ... We're not going to
make it happen. But I think what we do want to do is to give a
stronger voice to workers on boards."
On executive pay, he said the government would propose ways
of curbing excessive rates, including considering whether there
should be an annual binding vote by shareholders.
The average pay of bosses in Britain's FTSE 100 rose more
than 10 percent in 2015 to an average of 5.5 million pounds ($7
million), meaning CEOs now earn 140 times more than their
employees on average, according to a survey released in August.
"Executive pay has grown much faster over the last two
decades than pay in general and at times is not in line with
corporate performance," Clark said. "It's right to ask business
to play its part in building an economy that works for
(Additional reporting by Kylie MacLellan; Editing by Michael
Holden and Mark Heinrich)