What's got into the whisky at the
It was among the first to point out that
Other big public companies to feel the lash of its tongue include
"We are trying to get back to the focus on governance, on running companies better and in the interests of stakeholders broadly, in the climate we are in today.
"Competition and the market have, in my view, brought greater benefits to humanity than any other movement ever and we need to remind people about that. But we also need to make sure that it is competitive and is run in the interests of all its participants. That is what governance is all about. It is about running a business properly and in accordance with its professed purpose for all its stakeholders."
What is different from the past, however, is the IoD is prepared to single out major companies for criticism. The CBI, the other major business organisation with a royal charter, rarely does that.
"We have been quite specific and I see no need to resile from that," says Walker. "We have a huge advantage in that we are an organisation of 38,000 individual members, each of whom carries the same weight and pays the same subscription. I fully understand that other organisations that have corporate membership don't have the same luxury in the same sense."
No IoD member has resigned because of a stance taken on pay or governance, says Walker: "We have had a lot of positive comment on criticism of excessive pay in big companies in general, and banks in particular, and the membership has been as critical as any newspaper."
He says he received most protest from the ranks when he argued on the
Companies "engage with us, reply, they make their case" when criticised by the IoD, says Walker. He makes it sound polite. In private, some are furious about their rebukes.
The High Pay Centre calculated this week that the bosses of
"I have no problem with high pay in principle. I do think pay for top executive jobs has lost any sense of proportion. I am not one to focus – like the High Pay Centre – on ratios, because "fairness" and "fair" are not words that I bandy about. But excess, it seems to me, is clear and has been for decades; a decade certainly."
He blames, in part, the focus on "shareholder value", famously described in retirement by
He cites another famous admission, from
The moral of that tale, says Walker, is: "If you hire top, able, talented people, which you should do, and hold them to account, they will do a fundamentally decent job." The problem lies in skewed incentives that encourage "exotic" behaviour. "A company is not just about short-term profit and shareholder gain."
What would Walker – whose salary is £300,000 a year – regard as reasonable pay for a chief executive of a mid-ranking
"I would be reluctant to magic up a figure. It would clearly be a very large sum of money. But it is the variability and the capriciousness that strikes me as wrong."
He says he understands "the dilemmas" facing remuneration committees because: "A chief executive who rebuilds a company near collapse can make an extraordinary difference."
Walker was communications director of Reuters from 2002 and 2007 and thinks his old boss there,
Do not think, however, that the IoD wants the government to intervene on boardroom pay. On that issue, it is as attuned to market principles as one would expect. "It is fundamentally for shareholders to be asking these questions."
The most high-profile rebellion during this year's season of annual meetings was at
He applies the same shareholders-first thinking to foreign takeovers. The IoD was fiercely against any government intervention to block
But haven't fund managers, with a few exceptions, shown themselves to be pusillanimous on excess pay? "It may be that shareholders are pusillanimous because they haven't had any power," replies Walker. "In that sense I think what government has done in giving them a binding vote is appropriate."
He wonders whether fund managers could be pushed harder to apply stewardship principles.
He adds: "I am not a lawyer, but if there were civil remedies available against pension funds because they have been listless and apathetic in the way they engaged with companies in which they had large positions – that could be quite a constructive way to nudge shareholder activism. At the end of the day, this is your pension and my pension. It is not money held by rich titans on their own behalf."
The deeper issue, he argues, is about accountability in the boardroom. "I do deplore the extent to which public discourse about corporate governance has become about pay. Of course it matters. Of course remuneration incentives are important, but there are many more important issues. Questions about 'where was the board?' on critical decision-making around, say, RBS's strategy as
"What we know about those boards, for example, is that they included some of the most distinguished business people
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