A retrospective on the Greenbury provisons

Abstract

This thesis analyses corporate governance and executive remuneration in the UK during a period of precipitous change between 1992 and 2012. The study undertakes a mixed methods mode of enquiry to investigate the drivers and patterns of changes in corporate governance and executive remuneration. This thesis employs Bourdieusian perspectives on power, capital and fields, to illustrate those in society who operate in the field of power, harness observable forms of capital to cultivate policies which regenerate and support the elite body, which they are conceivably members of. The empirical setting for the analysis focuses on the 1995 Greenbury Committee, who played a central role in constructing the current framework for remuneration policy in UK organisations. Theoretically, this study propagates the idea of closure, as a specific mechanism in the field of power, whereby multiple elite groups come together, to address issues of mutual significance and thereby subvert threats to their collective authority. Using empirical data, the study questions normative interpretations of key concepts, such as merit, accountability and transparency, upon which much corporate governance regulation and remuneration decisions are predicated. Finally, the research reports on a de facto change from a unitary board structure, to a two tier system, structurally more akin to a German model of governance. The research finds that the Greenbury provisions failed in their stated objective, of linking pay with performance. This research also demonstrates that the construction of the Greenbury committee itself, was essentially a political response by the governing elite to address the ephemeral problem of executive remuneration and can, accordingly, be conceived of as an example of a form of quasi-political self-regulation.