Think tank urges businesses to promote pay transparency to boost equality

Firms should disclose the ratio between the highest and lowest-paid employees to promote greater workplace equality, urged the New Economics Foundation in a new report.

Publicly-listed companies should have to justify high-pay inequalities, such as in banking, because there were few circumstances in which radios above 20:1 could be defended on economic and social grounds.

Businesses should adopt a charter of responsible pay in their annual reports to show salary differences in their organisation, the report said.

“Inequality is damaging to society and high pay doesn’t improve performance at skilled work.

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“In fact, it does the opposite, becoming a distraction to the complex tasks of running a modern business,” said the author of the report, Andrew Simms.

“So why do our top businesses keep pushing open the gap between their highest and lowest-paid employees?

“Greater equality of pay at work is better for everyone, something admitted even by the IMF (International Monetary Fund].

“Transparency about pay ratios can begin to break open the cosy culture of remuneration that benefits disproportionately and counterproductively a tiny minority.”