British Prime Minister David Cameron called this week for more women in corporate boardrooms to break up a 'closed circle" in which men give each other high pay.
After weeks on the streets worldwide, the “Occupy” protesters – with their focus on corporate “greed” – may have achieved one thing so far.
In Britain, they likely pushed the Conservative prime minister to propose more women be placed on governing boards of financial firms as a way to reduce high salaries and bonuses.
Companies with more female directors, said David Cameron, would be less likely to practice “the usual sort of rotating list of men patting each other’s backs and increasing the level of remuneration.”
A corporation’s methods of setting executive pay, he told Parliament Wednesday, should not be done by a “closed circle of people.” Women would bring more diverse views and a wider discussion of what is excessive pay.
He’s just guessing, of course, based simply on gender stereotypes. Women executives, in general, do ask less often for pay raises than men. But whether female board members would spread profits more evenly to company stakeholders remains unproven.
Other ideas may work better. Mr. Cameron, like many others, suggests companies release information on pay levels and give shareholders more authority over pay. Similar structural reforms would shake up corporate practices that have led to high income inequality. And attracting more women to boards will require more of them to earn MBAs and enter the business of high finance.