The United Kingdom has a new Prime Minister.  Her name is Theresa May, and she’s a member of the

Photo by Scott P
Photo by Scott P

Conservative Party.  Remember that, because what you are about to read will probably lead you to think otherwise.

In a speech made a couple of days before Ms. May became Prime Minister, she said that she would pursue the following actions if she were to become Prime Minister:

  • Put consumers and employees on boards of directors: “[I]f I’m Prime Minister, we’re going to change [the] system – and we’re going to have not just consumers represented on company boards, but employees as well.”
  • Make say-on-pay binding: “I want to make shareholder votes on corporate pay not just advisory but binding.” (The U.K. already has binding say-on-pay, but it’s a convoluted system, and I can understand why she thinks it’s currently non-binding.)
  • Change how bonuses are determined: “I want to simplify the way bonuses are paid so that the bosses’ incentives are better aligned with the long-term interests of the company and its shareholders.”

She also wants to mandate disclosure of CEO pay ratios, which US companies will have to start providing in 2018.

A few days later, Bank of England Governor Mark Carney made a speech to the effect that companies need to provide better disclosure surrounding climate change issues, as they could have a calamitous effect on world markets.  He also suggested that the capital markets need to develop standards for new types of securities to help fund green projects.

Just a reminder – this is the Conservative Prime Minister and the Governor of the Bank of England.  Not Bernie Sanders.

At least where governance and disclosure are concerned, what happens in England doesn’t usually stay in England, so I suggest we keep watch for these and similar developments on our side of the pond.