The summary of the General Election manifestoes that was issued on 26 November has now been updated to include the manifestos of the Scottish National Party, Plaid Cymru and the Democratic Unionist Party. The Sinn Fein manifesto contains no specific governance-related commitments.
This briefing focuses only on those policy commitments that have a specific governance angle. The manifestos of four of the five national parties and, particularly, of the Scottish National Party contain a considerable number of commitments that could impact on the different sectors and organisations in which the Institute’s members work.
The Scottish National Party have joined Labour and the Liberal Democrats in requiring large companies to have employees on the board but go further by making commitments to increase the representation of women and minority communities on public and private sector boards. Plaid Cymru are taking a similar approach with a pledge to introduce gender balanced management boards in organisations funded by the Welsh Government. The Scottish National Party will also support moves to ensure that executive pension contributions are the same as for all workers in companies and that the balance of salaries of all employees within a company or organisation are considered when senior pay packages are decided. They will also press for the devolution of employment law to give the Scottish Parliament responsibility for workers’ rights (including the living wage).
The Scottish National Party is aligned with Labour and the Liberal Democrats, who have stated that they will introduce some form of general duty on companies relating to their impact on society and the environment, with their proposal for statutory climate change related disclosures in companies’ annual reports and the introduction of a system of climate-friendly external auditing of firms.
The Scottish National Party is also planning ‘immediate action, including reform of Companies House, to uncover the beneficial ownership of Scottish Limited Partnerships, other companies and trusts’, and will introduce measures to improve the transparency of tax paid by international companies.
Finally, both the Scottish National Party and Plaid Cymru have come up with radical approaches to some specific governance issues. The Scottish National Party will reinstate the reverse burden of proof requiring bank senior management to demonstrate they had done the right thing where wrongdoing had emerged on their watch, and Plaid Cymru will establish a new regulatory body responsible for setting and improving professional standards for managers within the NHS.
The Democratic Unionist Party manifesto supports the overhaul of corporate governance and audit to restore trust in business and reduce the likelihood of corporate collapses and systematic abuses of small businesses, but offers no specific proposals.
SUMMARY OF MANIFESTO COMMITMENTS
- Reform insolvency rules and the audit regime so that customers and suppliers – and UK taxpayers – are better protected when companies go into administration, and introduce legislation that protects pension pots from being plundered.
- Improve incentives to tackle excessive executive pay and rewards for failure.
- Through the Red Tape Challenge, ensure that regulation is sensible and proportionate, and that the needs of small businesses are considered when devising new rules.
- Create up to ten freeports around the UK.
- Establish a Community Ownership Fund to support local takeovers of civic organisations or community assets that are under threat.
- Set up a fan-led review of football governance, to include consideration of the Owners and Directors Test.
- Amend the Companies Act, requiring companies to prioritise long-term growth while strengthening protections for stakeholders, including smaller suppliers and pension funds.
- Change the criteria a company must meet to be listed on the London Stock Exchange so that any company that fails to contribute to tackling the climate and environmental emergency is delisted.
- Require large companies to set up Inclusive Ownership Funds. Up to 10% of a company will be owned collectively by employees, with dividend payments distributed equally among all, initially capped at £500 a year.
- Require one-third of boards to be reserved for elected worker-directors and give them more control over executive pay.
- Require all employers with over 250 employees (reducing to over 50 employees from 2021) will have to obtain government certification on gender equality or face further auditing and fines. Pay-gap reporting will be extended to BAME groups and disabled people for companies with over 250 employees.
- Enforce maximum pay ratios of 20:1 in the public sector.
- Review the ‘fit and proper person test’ for football club owners and directors, and legislate for accredited football supporters’ trusts to be able to appoint and remove at least two club directors and purchase shares when clubs change hands.
- Separate audit and accounting activities in major firms and impose more robust rules on auditors.
The Liberal Democrats
- Require all large companies to have a statement of corporate purpose and establish a general corporate duty of care for the environment and human rights; and require these companies to report on the wider impact of the business on society and the environment.
- Require all companies registered in the UK and listed on UK stock exchanges to set targets on climate change and to report on their implementation, and create new powers for regulators to act if banks and other investors are not managing climate risks properly.
- Give staff in listed companies with more than 250 employees a right to request shares.
- Require all UK-listed companies and all private companies with more than 250 employees to have at least one employee representative on their boards, and require staff representation on remuneration committees.
- Require binding and public votes of shareholders on executive pay policies.
- Push for at least 40 per cent of board members being women in FTSE 350 companies, and implement the recommendations of the Parker review on ethnic minority representation.
- Require companies with more than 250 employees to monitor and publish data on gender, BAME, and LGBT+ employment levels and pay gaps.
- Give communities the ability to take charge of aspects of their own local development through, for example, establishing local banks and community energy cooperatives.
- Overhaul financial services regulation and cut red tape.
- Create freeports in certain regions to encourage investment and create new jobs.
- Require businesses to take account of other stakeholders – including the ecosystem – and the impact of their activities on the climate and on communities.
- Require all large and medium size companies to carry out equal pay audits and redress any inequality uncovered both in terms of equal pay and recruitment and retention practices.
- Install a 40% quota for women on major company boards.
- Legislate to ensure the maximum wage paid to any member of staff in an organisation should not exceed ten times that paid to the lowest paid worker in the organisation, and ban any bonuses exceeding the annual wage of the lowest paid worker.
- Introduce participatory budgeting in local government, to enable local citizens to decide how to allocate part of the council budget.
- Replace OFSTED with a collaborative system of assessing and supporting schools locally, to improve standards and be accountable to the communities in which they serve
Scottish National Party
- Back moves to increase worker representation on company boards, and representation of women and minority communities on public and private sector boards (including by legislation).
- Back moves to ensure executive pension contributions are the same as for all workers in the company, and that the balance of salaries of all employees within a company or organisation are considered when senior pay packages are decided.
- Support moves for statutory climate change related disclosures in companies’ annual reports and the introduction of a system of climate-friendly external auditing of firms.
- Take immediate action, including reform of Companies House, to uncover the beneficial ownership of Scottish Limited Partnerships, other companies and trusts.
- Take measures to improve the transparency of tax paid by international companies.
- Reinstate the reverse burden of proof requiring bank senior management to demonstrate they had done the right thing where wrongdoing had emerged on their watch.
- Press for the devolution of employment law to give the Scottish Parliament responsibility for workers’ rights (including the living wage).
- Introduce gender balanced management boards in organisations funded by the Welsh Government.
- Establish a new regulatory body responsible for setting and improving professional standards for managers within the NHS.
Democratic Unionist Party
- Support the overhaul of corporate governance and audit to restore trust in business and reduce the likelihood of corporate collapses and systematic abuses of small businesses (but no specific proposals).
- No specific governance related commitments
Brexit - https://www.thebrexitparty.org/contract/
Conservative - https://vote.conservatives.com/our-plan
Democratic Unionist - http://www.mydup.com/
Labour - https://labour.org.uk/manifesto/
Liberal Democrat - https://www.libdems.org.uk/liberal-democrats-2019-manifesto
Green - https://campaigns.greenparty.org.uk/manifesto/
Plaid Cymru - https://www.partyof.wales/maniffesto_2019
Scottish National Party - https://www.snp.org/general-election-2019/
Sinn Fein - https://www.sinnfein.ie/files/2019/A4_manifestoWM2019_TOGETHER.pdf