May’s governance overhaul needs to result in better dialogue

Theresa May, the UK’s recently appointed prime minister, has pledged to tackle big business, promising an overhaul of corporate governance rules. Among the measures is a move toward binding votes on executive remuneration, replacing the vote’s current advisory function. 

Reaza Eftekhari and Louis Barbier from Morrow Sodali comment that May’s proposed plans could be a positive step toward closing the gap between executive and employee pay disparity, provided the measures lead to increased accountability and transparency. To achieve said changes, boards and executives should look to proactively engage with investors, regardless of current circumstances, to integrate responsible policies that link pay packages to performance.