Corporate Governance — House of Lords, 2016-11-29
Topic: Mixed Topics
Oliver Michael Robert Eden (Conservative, Centre-right): My Lords, I start by thanking both the noble Lord, Lord Mendelsohn, for his initial welcome for the Green Paper—he seemed to go off a bit after that when he compared this to a dangerous dogs debate—and the possibly slightly more generous welcome we heard from the noble Lord, Lord Foster. However, that too went a bit off as he went through his various disappointments. I hope I can deal with a number of those points in my response The first thing I must make absolutely clear to both noble Lords is that this is a Green Paper and therefore it is out for consultation. We are not, at this stage, telling people what our plans are. We are looking for views from noble Lords, including the noble Lords, Lord Mendelsohn and Lord Foster, and we are reaching out to people throughout the country to give us their views on how we should proceed It is important to remember that this is collaborative in its intent. We are not seeking to impose solutions. As I said, we are seeking consultation and high standards with low burdens The noble Lord, Lord Mendelsohn, claimed that the proposals have been designed purely to protect the status quo and watered down from earlier ideas. I completely refute that. As I said, this is a Green Paper designed to seek the views of noble Lords and people throughout the country as to what they want to do. We want to make this country one of the best places in the world to work. We want to invest and do business, and to seek the means to continue to have the right corporate governance framework, as is currently admired across the world—we have to look only at the amount of inward investment into this country to see evidence of that. We also seek further improvements that will receive the support of industry and of all others, including trade unions, who might have an interest in this The noble Lord, Lord Foster, asked what we are going to do to improve board diversity. It is not for us to impose solutions but we will certainly support the Hampton-Alexander review and its call to increase gender diversity in the boardroom—something I would like to see more of from boards. The noble Lord also mentioned small suppliers. It is very important that, as a constituency, small suppliers, which sometimes have problems with larger companies, be appropriately consulted and their voice better heard, whether in board decision-making or other fields The range of the consultation is obviously important and, as I said, we want to reach out to and hear the views of all concerned. For that reason, the Green Paper will focus on ensuring that executive pay is properly aligned to long-term performance, giving a greater voice to employees and consumers in the boardroom, and raising the bar for governance standards in the largest companies, whether privately owned or otherwise. Obviously, there will be other opportunities for noble Lords and others to put their views forward as we discuss the Green Paper. The consultation period will continue until 17 February next year. I will certainly welcome the views put forward by both noble Lords who have spoken and others, and I am sure the department will as well.