Attitudes of the British Public to Business Ethics 2024
17 June 2024
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
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
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
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
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
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