Speaking at a CIPD Valuing Your Talent event, honorary professor at the University of Nottingham’s School of Economics and former business secretary Vince Cable said although during his time in government he strengthened the corporate governance code and introduced measures like the requirement for firms to report their executive pay in a single number, he perhaps didn't “push [things] aggressively enough”.
“The systems we brought in made things better, as institutional investors are now challenging [excessive pay packages],” Cable told HR magazine at the event. “But the differentials still seem to be widening [between executive and median pay].
“What we didn't do, and what has to now be done, is focus much more on differentials within companies, and that means looking at pay ratios and making it obligatory to consult the workforce [on pay policy].”
The latest figures from the High Pay Centre compound Cable's sentiments. It found that on average FTSE 100 CEOs earn 125 times the amount of their average employees.
Cable, who lost his seat in the 2015 general election, also said he fears the diversity agenda is going backwards because of a lack of “energy”, and that there seems little interest in continuing his work on ethnic diversity at board level. In 2014 Cable called for one in five board directors to come from a non-white background.
“There’s not the same intensity of efforts from the government and investors [now],” he said. “Unless there’s more attention people will shrug their shoulders and walk away from [diversity].”
