THE local head of the body representing top bosses has backed Theresa May’s proposals to shake up executive pay and governance.

Jonathan Oxley, chairman of the Institute of Directors West Yorkshire branch, has echoed the national group’s broad support for Mrs May’s plans if she becomes Prime Minister.

These include binding votes on executive pay, having employees on boards and aligning executive pay closer to staff pay.

Mr Oxley, a corporate lawyer and director at law firm at Lupton Fawcett, said he believed businesses with a higher level of employee engagement performed better.

He believes the phrase “responsible capitalism” will be heard much more and that employee-owned businesses will become more common.

Mr Oxley said: “Theresa May has set out some interesting ideas which will need further work and development.

“What applies to a major plc may not be so appropriate for SMEs but in general the issues of executive pay and corporate governance do need tackling.”

Oliver Parry, the IoD’s head of corporate governance, said: “Theresa May has identified problems and is proposing remedies. When it comes to having workers on boards, there would be challenges in terms of training and induction, but it’s something we support if done on a voluntary basis.

“We’re also in favour of either annual binding votes on executive pay, rather than the current three years, or having flexibility from boards if circumstances demand that pay should be reviewed. On pay ratios, it’s not always helpful, but it’s something we would support on a voluntary basis.”

Mrs May pledged that if she becomes prime minister, she will push for consumers and employees to be represented on company boards, make shareholder votes on pay binding rather than advisory and make transparent the ratio between chief executive pay and the average company worker’s pay.

She said: “It is not anti-business to suggest that big business needs to change. Better governance will help these companies to take better decisions, for their own benefit and that of the economy.”