The Problem of Income Inequality: Lord Wedderburn on Fat Cats, Corporate Governance and Workers

This article evaluates Lord Wedderburn's scholarship on the role of workers in company law and corporate governance, focusing on Wedderburn's proposal that worker representatives should be included in the remuneration committees of large corporations as a starting point in tackling the growing disparity between the highest and lowest paid workers in the firm. The article addresses the efficiency implications of worker participation in setting executive pay, highlighting the complementarity between the normative framework of efficiency and Wedderburn's commitment to social justice. On that premise the article formulates a critique of growing wage disparity by reference to the firm's decision-making processes: who makes the decisions about pay, what are the key factors taken into account by the decision-makers and what role can be played by worker participation in making pay awards more acceptable?