The social construction of executive remuneration in the UK : Elite competition around codification and legitimation

Purpose The purpose of this paper is to reflect theoretically on a quarter-century of attempts to codify “best practice” standards related to oversight of and reporting on executive remuneration. Issues around the regulation of UK executive remuneration are analysed focussing on decision making by elite actors, informed by corporate governance codification artefacts and theoretical considerations inspired by notions of the social construction of reality. Design/methodology/approach Using documentary materials to trace evolution of executive remuneration regulation in the UK, consideration is given to the social antecedents of processes governing corporate board remuneration committee practices. The paper reconstructs the social construction of the UK Corporate Governance Code and draws on relevant theoretically inclined literature to help make sense of processes involved. Findings Shaping the problems, to be addressed as “legitimate problems”, is core to efforts intended to create “persuasive narratives” around how UK executive remuneration should be regulated. Research limitations/implications The paper sketches an agenda for subsequent empirical “field” investigation to assess the social antecedents of UK executive remuneration outcomes. Practical implications Offering an alternative way of thinking about executive reward and on-going controversy as to how it may be legitimately regulated, informed by contextual considerations. Originality/value A novel look at executive remuneration from a social construction of reality perspective. Adding value to public debate on organisational effectiveness at a time of warnings from luminaries such as the Bank of England governor about the adverse social impact of “stateless companies” and calls for action against unfairness in income distribution.