WWJD? Cut executive pay?

Transcript

World Finance: James, do you think religion should play a role in economic policy?
Dr James Corah: We’re not going to talk about economic policy at the macro level; but personally, one of the things that drives me to do the job that I do, and one of the things that our clients are very keen on, is making sure that businesses are aware of their social perspectives. They’re the people who are relating to the micro economy on a daily basis.

And churches who have teachings in this area: they’re telling us as an investment manager to make sure that we’re reflecting the most important concerns for them to the companies they’re investing in.

So yes, I do think there’s a role for church investors to play in representing the values of what it is they’ve got to do; and making a change happen as an additional mission benefit, over and on top of top quartile investment returns.

[C]hurch investors can be proud of how they really helped add to a social benefit to the corporate workplace

World Finance: Well inequality is a big issue at the moment; what are your thoughts on the living wage?
Dr James Corah: One of the things that our church investor clients have been saying for a long time, is they don’t like what they consider to be excessive executive pay. They really do believe that executives of companies should be rewarded for growing a business, for the skill and level of endeavour that they’ve shown in generating a growing business. And they do want to reward them. But they are just concerned that some of the pay packages are just too much.

So for a very long time now, we have been voting against something like 70 percent of FTSE 100 remuneration reports.

As a recent catch-up on that, the narrative has gone from ‘pay at the top is too much’ to ‘pay at the bottom is far too low.’ And if you look at the figures about in-work poverty, our clients are increasingly getting scared about the people who are being left behind in that sense.

So what they have asked us to do is to continue voting against those remuneration reports, but to signal our support for endeavours like the living wage, and make sure that we are really engaging with companies on a sector by sector basis, to make sure that all of their staff in the UK, and their contractors, are now being paid above the living wage rate.

World Finance: I want to draw your attention now to a quote by Frank Borman, who said that “capitalism without bankruptcy is like Christianity without hell.” So there have to be losers in society to justify winners – so surely finance and the church are not that different?
Dr James Corah: What we have learned from church investors and charities more broadly is that there’s a very productive conversation that can be had; they don’t have to be seen as opposites. You can really talk to each other, so the churches can generate top level financial returns to fund their activities, but also get a mission benefit by actually talking about the things that matter for the companies, who are very responsive to them, and can make changes happen.

And church investors can be proud of how they really helped add to a social benefit to the corporate workplace.