Corporate Governance

Lord Bishop of St Albans Excerpts

Tuesday 29th November 2016 Lords Chamber

[Lord Henley]

My Lords, I think that I can give that assurance to the noble Baroness. I can also say that, as far as I am aware, my right honourable friend has had discussions with the head of the TUC and others, and certainly those discussions will continue over the period of the consultation relating to this Green Paper.

[The Lord Bishop of St Albans]

My Lords, I, too, welcome the Statement and the Green Paper because we urgently need some fresh thinking in this area. Those of us who have been following the issues concerning banking standards can see that it is really quite complex. There is a delicate and difficult relationship between legal regulation on the one hand and values and social responsibility on the other. We face a number of problems. We have a disconnect between shareholders and corporations that has become ever more complex and further apart. How can we encourage shareholder engagement in long-term, sustainable business rather than short-term gains? How are we going to align more closely the remuneration of senior management to reward long-term growth and sustainability, and how can we reboot some of the social responsibility which is fundamental to this long-term success? The Statement mentions our legal system, our framework of company law and so on, and of course many of the multinationals rely on our social structures, including our education and health services. They take advantage of them but do not necessarily respond by taking their full responsibilities. I hope that the Green Paper will spark a wider debate about values as well as about law and regulation.