Business groups react to new PM's plans for reform

Business groups react to new PM's plans for reform

Following Theresa May’s appointment as Prime Minister, business groups have been giving their reactions to her appointment and plans to reform Britain’s boardrooms.

The Institute of Directors (IoD) has given ‘tentative support’ to Mrs May’s pledge to scrutinise and make significant changes to corporate governance, including placing workers on the boards of major corporations.

In a speech made just before her rival Andrea Leadsom dropped out of the Conservative leadership contest, Mrs May stated that she would ‘change that system’ and detailed her plans to ‘have not just consumers represented on company boards, but workers as well’. She also announced her intentions to make shareholder votes on corporate pay binding.

Commenting, Oliver Parry, head of corporate governance at the IoD, said: ‘Theresa May has suggested some bold solutions, and the details will need to be considered carefully, but the IoD agrees it is time to give shareholders more control over executive pay.’

He continued: ‘Placing workers on boards can bring benefits in terms of better employee engagement, and we would urge companies to consider doing so, although we would stop short of making it compulsory for firms.’

The Trades Union Congress has also welcomed the plans, suggesting that the changes will bring a ‘much-needed dose of reality into boardrooms.’

Meanwhile, the Director-General of the Confederation of British Industry (CBI), Carolyn Fairbairn, said businesses who have been calling for strong, stable leadership will welcome the appointment of Theresa May as Britain’s Prime Minister.

The business lobby group added that negotiating the UK’s new relationship with the European Union should be the most ‘pressing priority’ for Mrs May and her new-look cabinet.

Its calls were echoed by the British Chambers of Commerce (BCC), which also wants to see clarity on the key issues affecting businesses, including Britain’s withdrawal from the EU.

‘The watchwords for business remain stability, clarity and action,’ the BCC said in a statement. ‘Mrs May and her new administration must work to bring stability to markets, clarity on the timetable for changes to our relationship with Europe, and action on the many issues that matter for growth.’

In the hours following her move to number 10, the new Prime Minister revealed that David Davis had been selected to undertake the new cabinet position of Secretary of State for the European Union – dubbed the ‘Brexit secretary’.

Details are still emerging regarding the new Brexit Department, however it is likely to be the main force in negotiating Britain’s exit from the EU.