The prime minister’s plans for more binding votes on remuneration took a turn earlier this week as a proposed crackdown on corporate governance was, for the second time, abandoned by Theresa May. The U-turn comes after May’s initial plans, set out in November 2016, revealed broad discrepancies with the realities of the corporate landscape. Yet despite notable efforts from business professionals to curtail corporate excess, questions around transparency, pay ratios and accountability continue to hold relevance.

Current UK legislation requires listed companies to hold binding votes on pay policies every three years. Proposed reforms put forward a more ‘targeted’ use of binding votes, allowing shareholders the control and autonomy to have their say on executive pay. Yet government plans were stifled by a ‘watered down’ approach to corporate governance, dragooned by both terse Brexit negotiations and the loss of May’s majority in the House of Commons.

More than a third of the UK’s big listed companies fail to meet requirements set out by the Financial Reporting Council. Yet over the last year, average pay of chief executives for Britain’s top listed companies fell by approximately £1m, to £4.5m. However, government officials insist that despite successful figures, there is still “more to be done.”  

Greg Clark, business secretary, made clear last November that the intention to publish accurate pay ratio reports would remain intact despite Theresa May’s reticence. To do so however, further transparency on reporting measures would need to be put in place, with business leaders continuing to express willingness to divulge and expand on annual pay figures.

As the government prepares to publish a paper on corporate governance next week, cooperative measures in achieving corporate change remain top of the agenda. May’s lack of firmness on the matter however, shows that business itself may be the more appropriate decision-maker.