Last week Ed Milliband, speaking to a business audience, called for an overhaul of corporate governance in UK boardrooms to produce “more responsible capitalism”.
He suggested that shareholders’ voting rights should vary depending on how long the shares had been held and also questioned whether companies’ long-term strategy was undermined by having to produce quarterly reports.
He also repeated his call for there to be an employee on the remuneration committee of every major company and criticised the government‘s plans to make it more difficult for staff to take employers to employment tribunals, saying that the government was only offering “more of the same” in its backing for a “hire and fire” mentality.
As previously discussed in these pages, the idea of having an employee on remuneration committees is a bit of a non-starter given the difficulty of electing someone in an organisation of several thousand employees to be in any way representative and totally misses the point of having non-executives.
Similarly impractical is the idea of linking shareholder voting rights to the length of time the shares have been held – a nightmare for registrars and company secretaries with questionable benefits to corporate governance.
With regard to long term strategy perhaps he might like to consider whether long term political strategy is undermined by having to have elections every 5 years.
