02 Feb Labour to conduct a review of corporate short-termism
Ed Miliband, the Labour leader, has said that Labour will shortly conduct a review of short-termism in British corporate life.
He wants to end the situation where the chief executive wants to make decisions which will benefit his company in five years; when some of his shareholders are only interested in results in the next two months. Ed Miliband specifically identified quarterly reporting as one of the facets of this short term culture which will be under review.
The Labour leader is also of the view that this short term culture is to blame for the lack of skills and opportunities for the young. He said:
we have to end the situation where an industry knows it is in its long-term interest to invest in the skills of its workforce, but each firm doesn’t act because it isn’t in their short-term interest.
Though the only specific policy he proposed around this was that major government contracts should only go to those who offer apprenticeships.
Mr Miliband also reiterated the position that he advanced at last year’s Labour Party conference; that remuneration committees should have an employee representative ‘so that top executives have to look an ordinary member of staff in the eye before they award themselves a pay rise’.
For full details on the speech at the OXO Tower, London on 10 January 2012 please see here.