Has Theresa May broken her promise to workers?

"In the 1980s it was Asil Nadir's Polly Peck and the late Robert Maxwell who prompted a series of corporate governance reforms", says the BBC's Simon Jack. Now it is Sports Direct and BHS that "are the poster children" for the latest government crackdown on business.

Except some do not think the proposals outlined by in a government discussion paper yesterday are much of a crackdown at all.

In particular, says The Times, Prime Minister Theresa May was criticised for "backtracking on her promise to put workers on company boards".

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

During her short Tory leadership campaign in the summer, May said she would ensure it was "not just consumers represented on company boards, but employees as well". She repeated the pledge at the Conservative Party conference in October.

But in the event, the government has proposed employees could be represented by "advisory panels", or by asking an existing non-executive director to represent workers' views.

"Having a glorified suggestion box or giving that responsibility to an existing member of the board does not amount to a genuine voice for workers," TUC general secretary Frances O’Grady told The Guardian:

"The only way you can have a genuine voice for workers is [to] elect them."

"In countries that have workers on boards, which is the majority in Europe, it shows that they have better investment in R&D, better investment in skills and they tend to take decision that are more about the long term."

However, Business Secretary Greg Clark defended the proposals, saying: "We have this legal tradition of having a unitary board, not delegates of groups but function for the whole interests of the company.

"That has been successful so I would not want to mandate the replacement of something that had been successful."

Other proposals in the paper include measures to curb excessive executive pay, including forcing firms to publish ratios comparing the pay of bosses to the average worker.

But in another apparent U-turn, a pledge to "to make shareholder votes on corporate pay not just advisory but binding" is suggested to be limited to bonuses, or to firms that have suffered past investor revolts on pay.

Clive Lewis, the shadow business secretary, said the proposals would not have stopped this summer’s "corporate governance scandals" at BHS and Sports Direct, says The Times.