The Nature of the Universe

Many argue that the two major worldviews competing for the hearts and minds of our individualistic western culture are that of naturalism (or secular humanism) and classic monotheism (including Christianity, Islam and Judaism).  And some Christians think that since we live in a largely secular, pluralist society, bombarded now and again by the aggressive techniques of the New Atheists and more subtle messages of popular culture, that the greatest threat to the church and the souls of the people is non-belief.  I think that fear is misplaced, because there’s a third worldview which has been making significant inroads in the west.  The New Age movement, which is eastern philosophy packaged for the west, is based on the notion that god inhabits all living and non-living things.  And though the term monism might not be familiar to everyone, most would be very aware of the myriad eastern monistic spiritual practices that are available at every leisure centre, spa, many businesses, some schools and even some churches. These include yoga, meditation and mindfulness along with many other alternative New Age therapies.

Many have found it quite difficult to live life on a daily basis holding a completely naturalistic worldview, despite the exhortations of Richard Dawkins.   Bertrand Russell famously concluded that a world that has arisen out of chance is ultimately without meaning or purpose and it’s therefore unsurprising that humans feel great despair if they’re honest about the implications of that worldview.  Sigmund Freud did not believe in love, claiming that the end of all things was sex; yet in his personal life he couldn’t maintain this notion, writing to his fiancée: ‘When you come to me, little Princess, love me irrationally.’[1]

Many atheists have been trying incredibly hard to reinvest a secular worldview with a deeper emotional sense (in true post-modern style).  Richard Dawkins uses literary devises such as describing the universe as magical; Alain de Botton would like to have churches and other rituals for atheists, but devoid of any actual ideas and A. C. Grayling has put together a bible of his own full of random unreferenced ‘wisdom’ from the ages. Others like Steven Pinker claim that evolution is the answer to all our ills; it’s making us better and that the future is bright without reference to any metaphysical influence.  All these are attempts to give secularism a human face and shiny gloss.

In a high-tech, competitive culture, the New Age fills the gap that people feel in lives characterised by alienation, atomisation and impersonalisation.  In a world where the cosmos, as Carl Sagan asserted, is all that is or ever was or ever will be, the New Age provides people with the notion that there’s more to life than what we can see and measure; that there’s a metaphysical realm in which human beings can find meaning and purpose.  Marianne Williamson, a guru of one branch of the movement, claims ‘the universe has a vested interest in your self-actualisation.’[2]  The New Age promises comfort in the form of a purported spiritual energy that connects us all and invests the universe with a sense of the sacred, especially for those who find Christianity intolerant or dogmatic.  It also requires no commitment to truth.  I think this is the appeal of monism but ultimately also its undoing.

Many of the claims of the New Age are based on some very ancient ideas.  Neoplatonism, a philosophy developed by Plotinus and others in the 3rd Century, is one of the forerunners of the New Age and is based on the spiritual and cosmological aspects of Platonic thought combined with Egyptian and Jewish theology.  It’s a formulation of an entire metaphysical system of the universe and man’s place within it.  A full understanding of this occurs through the practice of mysticism, whereby a person is able to realise (1) the high origin of the human soul, (2) that his soul has departed from its ‘first estate’ and (3) that it is possible to return there.  By means of ascetic observances, a person can become more spiritual and enduring which should lead to virtue which is one step on the way to ‘becoming God’, or henosis.   This contemplation of the One, through an ecstatic experience, is not accessible through thought but rather through a state of perfect passivity and repose.  The soul must pass through a spiritual curriculum whereby it must withdraw into the depths of its own being, rise to the world of the nous (ideas), and then in a state of highest tension and concentration, behold in silence and utter forgetfulness all things.  It is then that the soul is able to lose itself and become swallowed up in divinity.  This is strikingly similar to the ideas behind the spiritual practices of the New Age. 

In eastern philosophy and the New Age, the human problem is a lack of knowledge of one’s true nature; because people are mired in the vale of illusion, they are unable to view reality 'properly.'  To understand that problems are merely illusions, it is necessary to change one’s state of consciousness.  In doing so, one will realise that they in fact are god because god is in everything.  In the Upanishads, a liberated human being has realised Brahman, the supreme spirit of the universe, as his or her own true self, called atman.   In oneness, all differences disappear, including personality and uniqueness.  Oneness, in this worldview, is ultimate.  Because distinctions are considered to be illusory, truth is dispensed with as well as morals, logic and reason.  In man’s highest state, the mind is emptied of rational thought.

In America, many are no longer making a commitment to a single faith or espouse the truth claims of a single worldview.  American youth in particular, have weaved together a faith system based on the following beliefs:

• A god exists who created and ordered the world and watches over human life on earth.
• God wants people to be good, nice, and fair to each other, as taught in the Bible and by most world religions.
• The central goal of life is to be happy and to feel good about oneself.
• God does not need to be particularly involved in one’s life, except when God is needed to resolve a problem.
• Good people go to heaven when they die.[3]

This worldview, called Moralistic Therapeutic Deism (MTD), dispenses with notions of sin, contrition and repentance.  In this it is similar to monism. The chief concern of therapeutic deists is their own happiness, including their physical and psychological well-being.  It views God as ‘something like a combination of Divine Butler and Cosmic Therapist: he’s always on call, takes care of any problems that arise, professionally helps his people to feel better about themselves, and does not become too personally involved in the process.’[4]  It was Freud who advised that in order to solve a person’s problems it is necessary to turn to the hidden recesses of a person’s inner being, rather than to the outer influences of community and environment in order to discover the true self and determine what is necessary for emotional health and happiness.  And the language of psychotherapy has become the manner in which people in the west are increasingly using to diagnose, understand and communicate with themselves and others.[5]  In MTD and the New Age Movement, the universe is at your service.  It is there to make you happy, not holy. 

Many Christian churches have adopted and now promote monistic spiritual practices including contemplative or centring prayer (the same technique as eastern meditation) and various other ‘spiritual disciplines’ which may include meditation, worship, charity, fasting, solitude, fellowship, service, journaling, celibacy, self-flagellation and chanting mantras.  Some of these may be entirely divorced from any Christina doctrine whatsoever.   Some Christians feel that to become more spiritual, to come in closer contact to God’s grace, they can increase this likelihood by performing these disciplines.  But as Don Carson says,

The pursuit of unmediated, mystical knowledge of God is unsanctioned by Scripture, and is dangerous in more than one way.  It does not matter whether this pursuit is undertaken within the confines of, say Buddhism or, in the Catholic tradition, by Julian of Norwich.  Neither instance recognises that our access to the knowledge of the living God is mediated exclusively through Christ, whose death and resurrection reconcile us to the living God.  To pursue unmediated, mystical knowledge of God is to announce that the person of Christ and his sacrificial work on our behalf are not necessary for the knowledge of God.  Sadly, it is easy to delight in mystical experiences, enjoyable and challenging in themselves, without knowing anything of the regenerating power of God, grounded in Christ’s cross work.[6]

The syncretism or interspirituality - the mixing religious traditions with eastern mystical techniques - means that many Christians espouse certain eastern beliefs.  These, combined with the growing number of MTD believers and fully-fledged New Age devotees, have meant that the number of people who hold New Age beliefs is enormous.  In 2002 over 40 million people in the US embraced the New Age movement making it the third largest religious denomination in America.[7]   A Pew Research poll of religious beliefs in the US in 2009 found that around one-quarter of adults expressed beliefs in tenants of certain eastern faiths; 24% said they believed in reincarnation, 23% believed yoga was not just exercise but a spiritual practice; 26% believed in spiritual energy located in physical things and 25% believed in astrology.   In the consumer market, people who practice New Age spirituality or who embrace its lifestyle are included in the Lifestyle of Health and Sustainability demographic market segment which was estimated in 2006 at $300bn or 30% of the US consumer market. 

Is the universe a random collocation of atoms  upon which we have evolved to have a purpose which we make up for ourselves?  Or is it the highest ideal in itself - infused with energy - into which it is man’s responsibility to tap in order to understand his higher purpose?  Is it standing by to serve man's whim?  Or is the universe the beautiful and majestic creation of a loving, rational creator God who in his infinite grace allows man to choose for himself whether to believe in truth or to reject it; who provides meaning and purpose to children made in his image; who has revealed his exact likeness to us in his Son through whom we can know him, the world and ourselves as we truly are?

C. S. Lewis describes New Age evolutionary ideas or Life-Force philosophy as ‘a sort of tame God.  You can switch it on when you want, but it will not bother you.  All the thrills of religion and none of the cost.  Is the Life-Force the greatest achievement of wishful thinking the world has yet seen?’[8]   This is in comparison to the truth of ultimate reality; one in which we humans are derivative reality of God who has designed for us the happiness of 'being freely, voluntarily united to Him and to each other in an ecstasy of love and delight.'[9]  Frances Schaeffer put it this way, ‘the external world is not an extension of the essence of God; nevertheless the external world does reveal and exhibit who and what God is…both in the internal nature of man himself, which speaks of God as personal, and in the evidence of the thought of God expressed in the external, created universe.’[10] Jesus has provided us with the indwelling Holy Spirit who we receive through faith; ‘this opens the way for the Christian to know in the present life the reality of the supernatural.  This is where the Christian is to live…and the glory of the experiential reality of the Christian, as opposed to the bare existential experience, or the religious experiences of the east, is that we can do it with all the intellectual doors and windows open.’[11] We do now need a mystical experience to know the reality of the supernatural here and now.


The universe is neither a random collocation of atoms, nor is it ultimate reality. It is not an energy force connecting all things.  It's purpose is not to satisfy individual demands and wishes.  The universe is is a glorious creation of a loving God, as are we.

[1] Letter from Sigmund Freud to Martha Bernays, January 16, 1884 

[2] Marianne Williamson, A Return to Love lecture, St. James Church, Piccadilly London, 23 Mar 2012.

[3] As found in a study by sociologist Christian Smith in his book with Melinda Lundquist Denton, Soul Searching: The Religious and Spiritual Lives of American Teenagers, 2005.

[4] Smith and Lundquest Denton, 2005.
[5] Joe Carter, 'Deists who love Jesus (and talk like Freud)', The Gospel Coalition blog, 20 Mar 2012.

[6] Don Carson, ‘Spiritual Disciplines’ Themelios, vol 36, Issue 3, Nov 2011.

[7] Ray Yungen, A Time of Departing, Lighthouse Trails Publishing, 2006.

[8] C. S. Lewis, Mere Christianity, 1952., p. 26.
[9] ibid., p. 48.

[10] Francis A. Schaeffer, True Spirituality, 1971.

[11] ibid, p. 62.

Human Flourishing

Over the past decade, those involved in economic policy-making have come in for criticism for placing too much emphasis on GDP as the ultimate aim of and measure of a country’s success.  Many, particularly informed by psychology, have suggested that it would be preferable include other things which enhance the well-being of individuals and policies which promote its enhancement.   Australia and France are two countries which are actively pursuing a dashboard approach to measurement of economic performance and social progress.  In Australia this is monitored by the national statistics office’s Measures of Australia’s Progress [1] and in France by the Sen-Stiglitz initiative[2]. 

What these projects are attempting to do is monitor the factors in the socio-economy which impact the conditions under which people might achieve greater physical and mental security and the freedom to choose their vocation in life.  History, psychology, philosophy, sociology  theology – even economics of a bygone era -  will all attest that human flourishing is not simply a matter of satisfying drives and desires (which can, indeed, provide a certain amount of happiness for a time), but that it occurs when communities and/or institutions share values and support their members. This idea underpins the Big Society project as well.

We see in the Occupy movements around the world, the walkout of students from Prof. Mankiw’s macroeconomics class at Harvard and shareholder and public revulsion over executive rewards for failure that the injustices which have been an outcome of institutional unfairness and market failure are unsustainable.  As Diane Coyle says in her book The Economics of Enough, ‘a sort of existential introspection questioning the moral basis of the economic order has set in.’[3]  The question I sense lurking underneath a great deal of anger and anxiety is: what is purpose of life? What is the summum bonum of human existence? 

There have been a variety of answers provided since ancient times, some more persuasive, appealing or apparently relevant than others.  Psychology says that the highest good is human happiness and this is composed of a biological set point, the conditions of one’s life and voluntary activities.  Some life conditions can be changed (marital status and location) while others cannot (age, sex and race).   External conditions that can negatively impact happiness levels are noise, commuting, lack of control, shame and/or conflicts in relationships.[4] 

Is that it then? The highest purpose in life to be happy and the goal of political economic policy to be promoting as much of this as possible for the greatest number (as per John Stuart Mill)?  If so, then it seems obvious that happiness is a highly conditional state that can change like the weather.  And indeed Mihaly Csikszentmihalyi has found this to be the case – that when ‘a culture has had a run of good luck and for a while,’ this can lead to 'extreme disillusion when it is no longer able to carry on ‘shielding’ its members from chaos.'[5] 

It seems to be an apposite time to think again about what makes a life worth living and enables a society to flourish.  Aristotle said that the highest good - one that would lead to eudaemonia, a term which encompasses happiness but which is deeper and longer-lasting - is for people to lead virtuous lives.  It was Aristotle who pointed out that human beings are telic creatures – they need to live for something; there must be some purpose which captures a person’s deepest longings.  Psychologists Ed Diener and Robert Biswas-Diener concur, saying: Humans are unique among animals in many respects; perhaps chief among them is the ability to live virtuously and find purpose in life.  As humans, we actually require a sense of meaning to thrive.[6]   Is that goal happiness?  It depends on your worldview.

The existentialists said that the purpose of life is whatever a person choses it to be – this arising from the notion that existence precedes essence and that ultimate reality is the human being.  Atheists often say something similar, as well as do some self-styled help gurus, some artists and novelists and some social scientists.   As Sally Brampton often remarks in her agony aunt column in the Sunday Times, ‘the point of living is that there is no point.  It’s what we make of life and how we see it that give it meaning.’[7]  Aldous Huxley was honest enough about his motivation for his atheist worldview, saying: 

I had motives for not wanting to the world to have a meaning; consequently I assumed that it had none and was able without any difficulty to find satisfying reasons for this assumption…the philosophy of meaninglessness was essentially an instrument of liberation…liberation from a certain system of morality…There was one admirably simple method in our political and erotic revolt: we could deny that the world had any meaning whatsoever.[8]

Perhaps the best description of the atheist worldview, which appears to me to be far more honest and rational than the debates of Richard Dawkins or the advice of Alain de Botton, comes from the British philosopher and logician Bertrand Russell, who said in his work A Free Man’s Worship:

That man is the product of causes which had no prevision of the end they were achieving; that his origin, his growth, his hopes and fears, his loves and his beliefs, are but the outcome of accidental collocations of atoms; that no fire, no heroism, no intensity of thought and feeling, can preserve and individual life beyond the grave; that all the labours of the ages, all the devotion, all the inspiration, all the noonday brightness of human genius, are destined to extinction in the vast death of the solar system,  and that the whole temple of man’s achievement must inevitably be buried beneath the debris of a universe in ruins – all these things, if not quite beyond dispute, are yet so nearly certain that no philosophy which rejects them can hope to stand.  Only within the scaffolding of these truths, only on the firm foundation of unyielding despair, can the soul’s salvation henceforth be safely built.[9]

The idea of meaning in life is further complicated by the question of human nature.  I think this is a topic psychologists have denied for years in favour of theories about genetics, thoughts, feelings and behaviour.  But even these long-held ideas are being challenged by the evolutionary social scientists like Steven Pinker who asserts in his tome, the Better Angels of our Nature, that statistics on violence suggest that human beings are becoming more peaceable – that human nature itself has been changing.  If one is using proportions to measure human violence against other humans, then by demography alone we know that those figures will decline over time. If you plotted the number of number of people killed or injured in war and civil conflicts per century, you would be horrified by the steeply accumulating numbers.  The Christian philosophy professor William Lane Craig has said that it is evident this is not the best way to assess mankind’s progress by asking this question: would you consider it progress if the 21^st century were also characterised by two more world wars and a nuclear exchange, the resulting proportionate fatalities being less than those of the conflagrations of the 20^th century?

When psychologists (or economists or sociologists for that matter) refer to ethics and human nature, I think they’re more often than not making claims about morality and human behaviour which can certainly change (for better or worse) over time and by locality.   Are we progressing in how we treat one another?  There are more slaves in the world today than in the entire history of the world.  Social scientists can’t even use the word evil because there is no outside referent in a secular humanist worldview.  There’s no such thing as evil, only dysfunction. 

The five categories of morality as described by Jonathan Haidt [10] (and referred to by Pinker) are believed by the evolutionaries (like Paul Seabright) to be innate.  And actually, I think most theologians and some philosophers wouldn’t disagree; people know a great deal about the right thing to do but have a deeply ambivalent relationship those truths.  Interestingly, despite this hard-wired sense of fairness, the big socio-economic story of the Anglo-Saxon west  of the past  30 years or so has that fairness has been sacrificed for efficiency (markets) and personal freedom (democratic process).  And these have been corroded by abuses of power.  Which makes the occupy protests unsurprising.

Amartya Sen has added an enormous amount to the debate over human well-being and the implications of such on economic and social policy.  Professor Sen has questioned the characterisation of human motivation as being purely rational and self-interested and that well-being has no single measure; rather, its elements are many and cannot be reduced down to utility or some cash-value equivalent.  He calls well-being’s diverse elements capabilities and says that they are composed of freedom from hunger, disease, indignity and discrimination.  Also, that human welfare is composed of both materialistic and non-materialistic factors including the ability to engage in economic transactions or political activities.  The emphasis is not only on how human beings actually function but also on them having the capability to function in important ways if they so wish. 

Professor Sen has brought the discipline of economics back to the political economy which Adam Smith envisaged in the 18^th century: that ethics and economics should be seen as one subject rather than two; that markets encapsulate values and that small ideas or measures of human happiness are not sufficient goals for policy or institutions. 

It is quite apparent that many people throughout history have sought the common good as their purpose in life.  These are the people that find their purpose in fighting for social justice, given the deep-seated notion that all people are created equal and deserve equitable opportunity and respect.  What I find fascinating is that this passion for justice appears in both people with religious faith and those without.   And I think this chimes with the summum bonum of Aristotle[11] as well as the great theologian St. Augustine and the political philosopher of our time, Michael Sandel. 

When I think about the concept of the striving for justice in a strife and anxiety-riven world, I’m reminded of one of my favourite quotes from C S Lewis:

My argument against God was that the universe seemed so cruel and unjust.  But how had I got this idea of just and unjust?  A man does not call a line crooked unless he has some idea of a straight line.  What was I comparing this universe to when I called it unjust?  If the whole show was bad and senseless from A to Z, so to speak, why did I, who was supposed to be part of the show, find myself in such violent reaction against it?  A man feels wet when he falls into water because man is to a water animal: a fish would not feel wet.  Of course I could have given up my idea of justice by saying it was nothing but a private idea of my own.  But if I did that, then my argument against God collapsed too – for the argument depended on saying that the world was really unjust, not simply that id did not happen to please my fancies.  Thus I the very act of trying to prove that God did not exist – in other words, that the whole of reality was senseless – I found I was forced to assume that one part of reality – namely my idea of justice – was full of sense.  Consequently atheism turns out to be too simple.  If the whole universe has no meaning, we should never have found out that it has no meaning: just as, if there were no light in the universe and therefore not creatures with eyes, we should never know it was dark.  Dark would be a word without meaning.[12] 

I think the single concept which encompasses the highest form of human flourishing, freedom, justice and the common good is what the Old Testament prophets called shalom.  This is sometimes defined as peace, but encompasses more than peace of mind or absence of military conflict.  Shalom means the webbing together of God, humans and all creation in justice[13], fulfilment and delight; it is universal flourishing which includes human flourishing.   And while it can be most fully experienced and offered by believers, God’s commitment to the spread of shalom is not limited only to those who know him by name or those who pursue it in his name.  As Bono says in the song City of Binding Lights, ‘Blessings not just for the ones who kneel, luckily.’[14]  The summum bonum is the peace, completeness and welfare which compose shalom, and it’s personal, social and political.

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[1] http://www.abs.gov.au/ausstats/abs@.nsf/0/5883EAD30A3CFD59CA256A8B007F8B8B?Open

[2] http://www.insee.fr/en/publications-et-services/dossiers_web/stiglitz/stiglitz_bilan_121011_anglais.pdf

[3] Diane Coyle, The Economics of Enough, Princeton University Press, 2011.

[4] Jonathan Haidt, The Happiness Hypothesis: Putting Ancient Wisdom and Philosophy to the Test of Modern Science, New York: Arrow Books, 2006.

[5] Mihaly Csikszentmilhalhi, Flow: The Psychology of Optimal Experience, HaperCollins, 1990.

[6] Ed Diener and Robert Biswas-Dener, Happiness: Unlocking the Mysteries of Psychological Wealth, London: Blackwell, 2008.

[7] Sally Brampton, Sunday Times, 10 Oct 2010.

[8] Aldous Huxley, Ends and Means, London, 1946,

[9] Bertrand Russell, A Free Man’s Worship, in Mysticism and Logic, London, 1918.

[10] Harm/Care, Fairness/Reciprocity, Ingroup/Loyalty, Authority/Respect and Purity/Sanctity as described in J. Haidt & C. Joseph, ‘The moral mind: how 5 sets of innate moral intuitions guide the development of many culture-specific virtues, and perhaps even modules,’ in P. Carruthers, S. Laurence and S. Stick (eds.), The Innate Mind, Vol. 3, New York: Oxford, 2006.

[11] For Aristotle, justice is the quintessential moral virtue and is the natural outcome of the virtuous person who desires to live the good life.  Justice, for Aristotle, is the end and the means of happiness.

[12] C S Lewis, Mere Christianity, 1943.

[13] As discussed by Nicolas Wolterstorff in audio interview, ‘It’s tied together by shalom,’ Faith & Leadership, March 2010.

[14] Bill Haley, ‘On Work and Human Flourishing: Twenty Men Fixing a Road,’ The Washington Institute for Faith, Vocation and Culture, Sept 2011.

Wheat and Chaff on a pinboard

We’ve always had a large bulletin board in our kitchen, filled with calendars, school & extracurricular diaries, notices of local events, party invites, greetings cards and various clippings of news and stories I’ve gathered from newspapers and magazines which I mean to share with my children.  A very crowded place, this patch of the kitchen wall.

Recently the pinboard came down as it was usurped by a piece of furniture.  This meant that all those bits and pieces - which I’d considered so vital - were filed.  However I did find a place to display the one bit of wisdom regarding judgment that I considered more important that all the rest among the paper pile.  It’s as much a reminder to myself as something I hope my children will learn from, no matter what worldview they eventually adopt. 

• Prejudice is the product of a lazy mind. 
• It’s contempt, prior to investigation.
• Your first impression of someone is incomplete and often inaccurate.
• Don’t assume your intuition is always right.
• Don’t make lasting decisions based on limited insights.
• Your success in life will be adversely affected by prejudice, fear and any form of discrimination you allow to colour your thinking.[1]

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[1] UCB, The World for Today, 5 April 2012, based on Acts 10:34.

The Stewardship Code and barriers to shareholder activism in executive pay

Can reforms in corporate governance reduce inequality?  It’s widely acknowledged by economists, sociologists and the public that excessive inequality is detrimental to society and is politically and economically unsustainable.  As Diane Coyle says in her book The Economics of Enough, “too great a degree of inequality not only adversely affects the well-being of society’s losers, it also corrodes the social scaffolding on which a prosperous economy must be built.   It is a question of sustainability exactly because it brings into question our ability to bequeath a healthy society to later generations.”

Recent reforms of corporate governance in the developed economies have focused on the disclosure of executive pay as a consequence of public outcry over enormous pay differentials between executives and lower wage earners, pay for failure and scholarly voices of dismay over inequality.  Voting rights over say on pay requirements in the UK, USA and elsewhere are being exercised by more informed shareholders, but is it enough?  Have they had much of an impact?  Alyce Lomax, commentator on a long-term investor website put it succinctly: “Whether here or abroad, corporate governance rules may only be as strong as the folks they’re meant to empower.  If we shareholders want managers and boards to stop squandering our money, we’ll have to actually use our newfound rights.” [1] 

Will the UK Stewardship Code be an effective means of affecting change in executive remuneration?  Will it actually foster greater shareholder involvement by institutional investors?  Professor Brian Cheffins has pointed out that changes in share ownership structure are the Code’s ‘Achilles heel.’[2]  The primary targets for the code – UK-based fund managers, pension funds and insurance companies dominated the share registers of UK quoted companies 20 years ago.  But now those registers are dominated by overseas investors, hedge funds and private individuals – who are not the code’s main targets.  The following chart comes from ONS data for 1993 and 2008 making this change in ownership distribution quite plain:

When a UK quoted company has such a fractionalised share register, it may be difficult to discern a single coherent point of view from such a disparate group of shareholders – this can pose a serious barrier to shareholder activism.  The Financial Times Lex column in 2009 said it well: ‘In a globalised financial world where ownership of listed companies is relentlessly fragmenting, the ability of long-term investors to influence corporate behaviour is being steadily eroded.’

So a few weeks ago, BIS put forward another consultation – this one aiming to enhance shareholder voting rights.  These will include a binding vote on future remuneration, increasing the level of support required on votes on future remuneration, an advisory vote on how pay policy has been implemented in the previous year and a binding vote on exit payments.  Will these have an impact on say on pay in the UK?  Manifest, the proxy voting consultancy, have looked at what would have happened had the support threshold been 75% with abstentions disregarded[3].  It estimates that since the introduction of the mandatory advisory vote (in 2002),67 FTSE 100 remuneration report votes would have failed to achieve the required support threshold, whereas based on the current majority requirement, only 3 firms have lost the vote (GSK, Royal Dutch Shell and RBS).   We await the evidence in response to the consultation and primary legislation next parliament.  Perhaps this will finally allow some headway to be made on executive pay and a more equitable distribution of the proceeds of prosperity.

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[1] Alyce Lomax, ‘Is Britain better on CEO pay?’ Fool.com, 1 Jun 2011

[2] Brian Cheffins, ‘The Stewardship Code’s Achilles’ Heel,’ University of Cambridge Faculty of Law, May 2011.

[3] ‘How would a super-majority support requirement impact UK say-on-pay votes?’ Manifest, Jan 2012.