Critics condemn Theresa May's '˜watered down' boardroom reforms

Restrictions on boardroom pay and financial excess in the City have been watered down says Labour. Picture: AFP/Getty Images

Listed companies will be forced to reveal the pay ratio between bosses and workers, while companies where shareholders revolt over excessive pay packets will be listed on a new public register.

The measures come after Prime Minister Theresa May branded fat-cat bosses the “unacceptable face of capitalism” but fall short of earlier suggestions.

Unveiling the package of reforms, Business Secretary Greg Clark said: “One of  Britain’s biggest assets in competing in the global economy is our deserved reputation for being a dependable and  confident place in which to do business.

“Today’s reforms will build on our strong reputation and ensure our largest companies are more transparent and accountable to their employees and shareholders.”

Under the reforms, the Financial Reporting Council is to amend its UK Corporate Governance Code so firms either assign a non-executive director to represent staff, create an employee advisory council or nominate a director from the workforce.

Listed companies will have to justify the difference in pay between average workers and the CEO.

Shadow business secretary Rebecca Long-Bailey accused the government of “watering down an original promise to increase workers’ voice to a lone representative on the board of directors or a  separate employee advisory council. Each of these will be easily outvoted or ignored.”

Liberal Democrat leader Sir Vince Cable dismissed the Government’s approach as “strong on rhetoric, weak on action”.

SNP business spokesman Drew Hendry said “irresponsible companies will not be  worried by these measures.

“The Tories have ditched the representation of workers at board level and rights for 25 per cent of shareholders to trigger binding votes at  company AGMs just to avoid backbench rebellions.”