The Federation of Small Businesses (FSB) has welcomed the government’s new Green Paper on corporate governance, which includes a proposal for large companies to appoint a Non-Executive Director to champion small suppliers at board level.
The Green Paper – entitled Corporate Governance Reform – was instigated following negative stories about high levels of executive pay and scandals at large corporations.
It contains a raft of proposals for consideration, including publishing pay ratios – which would show the gap in earnings between the chief executive and an average employee – and measures to give shareholders more powers to vote against executive pay packages. Of particular interest to small businesses is the measure to give suppliers a voice on the boards of major corporations.
Mike Cherry, National Chairman of the FSB, welcomed the government’s other Green Paper plans to combat ‘supply chain bullying’ and improve prompt payment.
He said: ‘FSB has been pushing hard for this reform, and we will now work to flesh out how this could work in practice. Small businesses right across the country will want to see this proposal adopted, so that whole Boards own a company’s payment practice and are held accountable for it. In our view, this issue lies at the very core of good corporate governance, and is required alongside reforms to transparency and the proposed Small Business Commissioner.’
The Green Paper can be found here.