Corporate Governance

Lord Tyrie Excerpts

1st reading: House of Commons
Tuesday 29th November 2016 Commons Chamber

[Greg Clark]

There are two Labour Back Benchers here. If one compares that with the number of my hon. Friends who are in the Chamber, there is scant evidence of Labour’s enthusiasm for these reforms. The hon. Member for Norwich South (Clive Lewis) tried to imply that Labour is the party of working people, but the difference in interest in this statement between the parties shows the opposite. I hope that the hon. Member for Eltham (Clive Efford) welcomes the measures that the Prime Minister and I are proposing to give not only employees but customers a voice in the boardroom. The hon. Gentleman is a big football fan and a fan of greater involvement of enthusiasts in football, and I hope that he will contribute positively to the consultation and back our proposals.

[Mr Andrew Tyrie (Chichester) (Con)]

Good pay structures encourage wealth creation, but the financial crisis showed that poorly constructed remuneration schemes contribute to catastrophic failures in corporate governance. In response, the Parliamentary Commission on Banking Standards recommended, among other things, longer deferral for bonuses and clawback for serious misconduct in some cases. Has the Minister examined whether those recommendations have any relevance to his Green Paper and whether they may, with particular regard to large firms, have a bearing on ways to militate against serious harm to customers, employees and the wider public?

[Greg Clark]

My right hon. Friend is right that good corporate governance can stop corporate failure and the effects of contamination that his commission was set up to investigate. The commission made some valuable recommendations, many of which have been enacted. When he comes to look at the Green Paper, he will see further proposals for how incentive schemes for executives can be better aligned with the long-term interests of the company and made more transparent.