Front runner in British PM race Theresa May vows corporate governance reforms

British Home Secretary Theresa May waves to members of the media outside of The Houses of Parliament in London, Britain, July 7.
British Home Secretary Theresa May waves to members of the media outside of The Houses of Parliament in London, Britain, July 7.PHOTO: EPA

LONDON (Reuters) - Mrs Theresa May, the favourite to succeed Mr David Cameron as British prime minister, will pledge on Monday (July 11) to overhaul corporate governance rules if elected, including putting workers on company boards and making shareholder votes on pay binding.

Mr Cameron said last month he was stepping down after voters rejected his bid to keep Britain in the European Union. Interior minister May is up against Junior Energy Minister Andrea Leadsom in a leadership contest due to be decided by Sept 9 in a vote by the Conservative Party's 150,000 grassroots members.

Launching her national leadership campaign, Mrs May, who like Mr Cameron backed Britain staying in the EU, will say non-executive directors are not providing enough scrutiny of company boards because they are drawn from the same social and professional circles.

"We need a bold, new, positive vision for the future of our country, a vision of a country that works for everyone, not just the privileged few," she will say during a speech in Birmingham, according to extracts released in advance by her team.

"I want to see changes in the way that big business is governed... So if I'm prime minister, we're going to change that system and we're going to have not just consumers represented on company boards, but workers as well."

ANNUAL PAY VOTES

Mrs May, who has portrayed herself as the candidate who can unite both the party and the country, will say Britain needs proven leadership to steer it through the economic and political uncertainty to come.

Her rival Leadsom was little-known until she emerged as a prominant voice in the Brexit campaign.

Setting out her plans for business after six years as interior minister, Mrs May will also announce she would enforce annual binding votes on both pay policy and specific pay packages of company directors.

Investors in every UK company have a non-binding vote yearly on the firm's remuneration report, which details the pay and perks given to executive directors in the year under review.

Shareholders are also guaranteed separate, binding votes at least once every three years on a firm's remuneration policy, which governs future payouts.

Chief executives at British companies have come under increasing pressure from shareholders over salary and bonus payments that have risen much more sharply than their workers'remuneration.

"We're the Conservative Party, and yes we're the party of enterprise, but that does not mean we should be prepared to accept that 'anything goes'," Mrs May will say.