To: Theresa May
Workers need a seat in the boardroom
Theresa May must legislate to see workers get a seat in the boardroom to rein in executive greed.
Why is this important?
Workers need a fairer share of the wealth they create. They are affected more than any other group by company decisions and deserve a say in how they are made.
According to this week’s report by the High Pay Centre and CIPD, CEOs were paid a staggering £560.1 million in the financial year ending 2017.
That works out as £5.7 million per CEO.
By contrast, workers’ pay has only increased by 2% - well below the current rate of inflation.
Countries with better worker participation tend to have lower levels of inequality and poverty, higher investment in research and development and better employment rates.
Workers have a clear interest in the long-term success of their company, unlike many shareholders, who if things go wrong can – and do – simply sell their shares. Their participation would encourage boards to take a long-term approach to company success.
While the government’s decision to bring in a pay ratio reporting requirement is welcomed, it's clear that much more needs to be done to help out the average worker.
Workers on company boards is hardly a radical idea. They’re the norm across most of Europe – including countries with similar single-tier board structures to the UK, such as Sweden.