Paying to be good?
The IBE’s Associate Director, Professor Chris Cowton, discusses a new question on CEO pay that was included in our recent public attitudes survey.
20 July 2023
What is the ethical issue?
Executive remuneration or pay is composed of the financial compensation and other awards received by a senior member from their company’s Board for their service and performance.
Executive remuneration is an important driver of behaviour and therefore of the way values are perceived throughout a company. Current approaches in the UK to how executive pay is set are very complicated, with outcomes that are uncertain and a process that is tough for boards to manage.
Executive pay can face substantial public scrutiny, with pay packages making headlines and receiving backlash for appearing ‘excessive’ or ‘lavish’. IBE research consistently reveals executive pay to be one of the most significant business ethics issues which the British public feel businesses need to address.
If an organisation is seen to continually offer increases in executive pay, against a backdrop of pay disparities, it can erode trust in the business, and have a negative impact on employee morale and the company's reputation.
IBE Guidance
A summary of good practice
- Evaluating and compensating performance on the basis of how objectives are met, as well as what is delivered, is vital. Outlining clear and balanced pay structures, and following these, should mitigate accusations of ‘excess’ for executive employees.
- Remuneration committees must have a clear sense of the value of what is being awarded, and they need to do more to justify the amount they have set for executives. In recent years, there have been growing efforts to improve transparency in the boardroom and taking into account the pay and conditions of the average employee when setting executive pay.
Further resources
Fair enough?
Deputy Director, Rachael Saunders outlines some of the key findings from the 2023 Attitudes of the British Public to Business Ethics survey.
13 July 2023
Attitudes of the British Public to Business Ethics 2023
The findings from the IBE's 2023 annual survey on British public attitudes toward business ethics reveal fewer believe businesses are operating ethically.
11 July 2023
If You’re So Ethical, Why Are You So Highly Paid? recording
Catch up on our latest webinar with Professor Alexander (‘Sandy’) Pepper.
16 December 2022
Attitudes of the British Public to Business Ethics 2021
Britain’s businesses could behave better - the 2021 results of the IBE's annual survey of the attitudes of the British public to business ethics.
17 January 2022
Decisions, decisions…
Read the latest blog by Mark Chambers, IBE's Associate Director (Governance).
11 March 2021
Attitudes. Ethics. Trust.
In this blog, Guendalina Donde, IBE's Head of Research, discusses the results of the 2020 Attitudes of the British Public to Business Ethics survey.
13 January 2021
Attitudes of the British Public to Business Ethics 2020
The 2020 results of the IBE's annual survey of the attitudes of the British public to business ethics.
30 December 2020
Business Ethics in the News 2020
This briefing provides an overview of the ethical concerns and lapses that were recorded by the IBE in its monitoring of media coverage in 2020.
23 December 2020
#PandemicAndBeyond - 20:20 Hindsight
In the first blog of the series, Pandemic and Beyond: the ethical issues, Mark Chambers, IBE’s Associate Director (Governance), introduces the series and reflects on the year so far.
02 September 2020
Business Ethics in the News 2019
This briefing provides an overview of the ethical concerns and lapses that were recorded by the IBE in its monitoring of media coverage in 2019. It gives an overview of which sectors and issues related to business ethics were most covered in the news. For 2019, we have recorded a total of 361 different stories involving lapses of companies with a UK presence.
29 January 2020
Attitudes of the British Public to Business Ethics: 2019
The 2019 results of the IBE's annual survey of the attitudes of the British public to business ethics.
17 December 2019
A Year In Review: Ethical Concerns and Lapses 2018
Read the IBE's annual analysis of business ethics news stories from the last year - which were the sectors and issues most in the news in 2018?
30 January 2019
Attitudes of the British Public to Business Ethics: 2018
The 2018 results of the IBE's annual survey of the attitudes of the British public to business ethics
13 December 2018
Attitudes of the British Public to Business Ethics: 2017
The 2017 results of the IBE's annual survey of the attitudes of the British public to business ethics
12 December 2017
Fair or Unfair: getting to grips with executive pay
This Board Briefing offers both practical advice on how remuneration committees can address the challenge and some pointers to possible reform centred around the need to be clear about the value of what is being awarded and the pace at which remuneration is earned. Fairness and simplicity are the two themes which run through this publication.
10 February 2016
Fairness in the workplace: Staffing and employment contracts
This IBE Briefing considers ethical issues related to staffing arrangements and employment contracts. Specifically, it looks at the potential ethical implications of the ‘casualisation’ of the workplace, including zero hours, agency contracts, part-time workers and transfers under TUPE.
30 April 2015
Fairness in the Workplace: Pay
This Briefing looks at how fairness can be achieved in the specific areas of executive remuneration and paying a living wage. It also briefly addresses some additional pay issues, and provides examples of ways in which some companies are addressing the issue of fairness in pay.
02 July 2014
Supply Chain and Payment Practices
This briefing explores the three issues involving supplier payments. It then looks at governmental attempts to curb the problems and how companies are addressing the issue.
06 November 2013