A think-tank report examined the impact of the Social Business Trust model of corporate social responsibility, designed to support social enterprises.
Source: Marc Stears and Imogen Parker, Responsible Capitalism and Behavioural Change: Evaluating the Social Business Trust and planning for the future, Institute for Public Policy Research
Links: Report
Date: 2012-Dec
A new book offered a critique of the theory that corporations should be run in the interests of all their primary 'stakeholders' – including employees, customers, suppliers, and financiers – without contradicting the ethical principles on which capitalism stood. By applying the political concept of a 'social contract' to the corporation, stakeholder theory in fact undermined the principles on which a market economy was based.
Source: Samuel Mansell, Capitalism, Corporations and the Social Contract: A critique of stakeholder theory, Cambridge University Press
Links: Summary
Date: 2012-Dec
A report by a committee of MPs said that HM Revenue and Customs was not doing enough to pursue multinational companies that were guilty of tax avoidance.
Source: HM Revenue & Customs: Annual Report and Accounts 2011-12, Nineteenth Report (Session 2012–13), HC 716, House of Commons Public Accounts Select Committee, TSO
Links: Report | Public Finance report
Date: 2012-Dec
A think tank published a series of essays on public trust in business.
Source: Better Business: Morals Matter, High Pay Centre
Links: Report
Date: 2012-Sep
A think-tank report said that company directors should be forced to repay bonuses if they underperformed.
Source: James Barty and Ben Jones, Executive Compensation: Reward for success not failure, Policy Exchange
Links: Report | Policy Exchange press release
Date: 2012-Jul
An article said that there was little, if any, meaningful association between directors' pay and corporate performance. The effects of previous efforts at reform tended to erode over time.
Source: Hristos Doucouliagos, Janto Haman, and Tom Stanley, 'Pay for performance and corporate governance reform', Industrial Relations, Volume 51 Issue 3
Links: Abstract
Date: 2012-Jun
The coalition government announced a package of reforms designed to allow shareholders to 'engage effectively with companies' on the issue of directors' pay. The proposals would give shareholders binding votes on pay policy and exit payments. They were welcomed by the Institute of Directors.
Source: Directors Pay: Guide to Government Reforms, Department for Business, Innovation and Skills
Links: Report | Hansard | DBIS press release | ABI press release | CBI press release | ICAEW press release | IER press release | IOD press release | Labour Party press release | PwC press release | TUC press release | Guardian report
Date: 2012-Jun
A paper said that senior management appeared to have pay that was strongly associated with various measures of firm performance (such as shareholder returns and quasi-rents), whereas workers' pay was only weakly associated with such measures. A 10 per cent increase in firm value was associated with an increase of 3 per cent in the pay of chief executive officers (CEOs), but only 0.2 per cent in average workers' pay. Falls in firm performance were also followed by CEO pay cuts and significantly more CEO firings. But only senior executives had a large enough share of pay in bonuses to generate a sizeable overall effect on pay. Firms with lower levels of institutional ownership had smaller pay-performance elasticities for CEOs and did not cut their pay when performance was poor.
Source: Brian Bell and John Van Reenen, Firm Performance and Wages: Evidence from across the corporate hierarchy, DP1088, Centre for Economic Performance (London School of Economics)
Links: Paper
Date: 2012-May
A new book examined the relationship between corporations and charities. It said that the two sectors were coming together as never before. The third sector had increased its business capacity through the experience gained from a decade of providing commissioned services to the public sector. Society increasingly expected employers to do more to engage with both communities and good causes: but business also realized that charities 'did conscience' better than they could, and so co-working was increasingly being sought.
Source: Tom Levitt, Partners for Good: Business, government and the third sector, Ashgate Publications
Links: Summary
Date: 2012-May
The Enterprise and Regulatory Reform Bill was published. It included measures to improve the employment tribunal system (by encouraging parties to come together to settle their dispute before an employment tribunal claim is lodged), and to give shareholders of quoted companies binding votes on directors remuneration.
Source: Enterprise and Regulatory Reform Bill, Department for Business, Innovation and Skills, TSO
Links: Bill | Explanatory notes | DBIS press release | Acas press release | CBI press release | IOD press release
Date: 2012-May
The Queen's Speech set out the coalition government's legislative programme for 2012-13. It included plans for an Enterprise and Regulatory Reform Bill. The employment tribunal system would be reformed by providing more options for the early resolution of disputes through the statutory arbitration and conciliation service. Company shareholders would be allowed a binding vote on the remuneration of directors.
Source: Queen's Speech, 9 May 2012, columns 3-5, House of Commons Hansard, TSO
Links: Hansard | Cabinet Office briefing | CBI press release | Fawcett Society press release | IER press release | TUC press release (1) | BBC report
Date: 2012-May
A think-tank report said that, out of 366 people who sat on the remuneration committees that set lead pay for top executives, just 10 per cent – 37 members – were not from business or financial intermediation. Only 59, or 16 per cent of the total, were women. This lack of diversity raised questions on how effectively the boards were able to monitor the company's management in the interests of shareholders and other stakeholders.
Source: The New Closed Shop: Who s deciding on pay?, High Pay Centre
Links: Report | IOD press release | Labour Party press release | Guardian report
Date: 2012-Apr
A think-tank report described a new tool designed to measure the social value of corporate sponsorship.
Source: Max Wind-Cowie and Claudia Wood, Measuring Up: The social value of sponsorship, Demos
Date: 2012-Apr
A new book examined the social aspect of corporate social responsibility in European welfare states.
Source: Jeanette Brejning, Corporate Social Responsibility and the Welfare State: The historical and contemporary role of CSR in the mixed economy of welfare, Ashgate Publications
Links: Summary
Date: 2012-Jan
The coalition government announced (following consultation) plans designed to curb excessive pay levels for company executives. Shareholders would be given more powers to block excessive pay packages, and companies would be encouraged to increase diversity on their boards. Companies would also have to justify high salaries in their remuneration reports.
Source: Debate 23 January 2012, columns 23-36, House of Commons Hansard, TSO
Links: Hansard | Consultation responses | CBI press release | IMA press release | IOD press release | Labour Party press release | PIRC press release | TUC press release | Unite press release | Work Foundation blog release | BBC report | Guardian report (1) | Guardian report (2) | Guardian report (3)
Date: 2012-Jan