Theresa May’s Government might have fought shy of some of the more radical ideas on business reform with the release of its green paper on corporate governance, but MPs on the Business Committee are, it seems, made of sterner stuff.

A report just released says British business must act on governance failings and pay, correctly highlighting the low level of trust in business in this country when compared to many similar developed economies.

A particular bugbear is, of course, the explosion in CEO pay we have witnessed in recent years, despite scant evidence that it has produced any improvement in either corporate or economic performance.

But how to change things, and improve the level of esteem in which business is held?

The report is full of good ideas when it comes to governance reform generally. It's more up and down on the subject of bosses pay.

But first the good stuff. I particularly liked the idea of a traffic light style rating system, which would see the Financial Reporting Council assessing businesses and giving their governance a green, amber or a red light.

That could be fun. You can just imagine the squealing from companies in the latter two categories. Would anyone like to guess who’d be the first to get a red? I’m thinking of a certain sports retailer you may have heard of. But Sports Direct is far from being the only contender.

It is slightly concerning that the committee would like the Financial Reporting Council to run this. In fact many of its recommendations are predicated on the FRC to doing its job properly. Under the leadership of Stephen Haddrill its record has been mixed.

It took, for example, eight years for an investigation to be launched into KPMG’s auditing of HBOS in the run up to the bank's near collapse and rescue by Lloyds. Not a good look. Still, the watchdog’s recent appointment of a panel to investigate its disciplinary system is a hopeful sign.

The report also has good things to say about improving boardroom diversity, urging the setting of targets for hiring women to senior executive positions in addition to non executive directorships. It further calls on the FRC to embed the promotion of the ethnic diversity of boards within a revised governance code.

Under its plans, companies would have to report on progress in both spheres in their annual reports. Again, a good idea, although it is deeply disappointing that the report fails to highlight disability. Why is this so often ignored?

Making non executive directors more accountable, and requiring them to prove convincingly that they are able to devote sufficient time to each company when they serve on multiple boards is another suggestion that merits taking up. Too many NEDs have too many appointments.

On the subject of pay, the most pressing governance issue of the day, the report is less sure footed.

Workers on remuneration committees? Good. “Stakeholder advisory panels”, including workers, consumers, and suppliers, to help collaboration and dialogue. Terrible name, terrific idea.

Requiring companies to publish pay ratios, comparing CEO pay to the pay of the average employee (as John Lewis does) but also to the pay of senior employees generally? Tick.

However, the report rejects annual binding votes on bosses pay. Instead these would only be held if 25 per cent of shareholders who vote first come out against a remuneration report the previous year.

That’s a cop out. If companies actually listened to their shareholders, they wouldn’t need to worry about votes on pay. Boards need to learn to heed the warnings they get in private. A binding annual vote would force them to do that.

Business news: In pictures Show all 13 1 /13 Business news: In pictures Business news: In pictures Flybe collapses Airline Flybe has collapsed. All future flights on the Exeter-based airline have been cancelled – leaving more than 2,300 staff facing an uncertain future, and wrecking the travel plans of hundreds of thousands of passengers. The chief executive, Mark Anderson, said: “Europe’s largest independent regional airline has been unable to overcome significant funding challenges to its business. AFP via Getty Business news: In pictures Future product placement will be 'tailored to individual viewers' Marketing executives say that product placement in films and televison shows on streaming services such as Netflix may be tailored to individuals in future. For instance, if data shows that a viewer is a fan of pepsi, a billboard in the background of a shot would host an advert for pepsi, while for a viewer known to have different tastes it could be for Coca-Cola Paramount Business news: In pictures Corbyn wishes Amazon a happy birthday In a card sent to Amazon CEO Jeff Bezos on the company's 25th birthday, Labour leader Jeremy Corbyn writes: "You owe the British people millions in taxes that pay for the public services that we all rely on. Please pay your fair share" Business news: In pictures No deal, no tariffs The government has announced that it would slash almost all tariffs in the event of a no-deal Brexit. Notable exceptions include cars and meat, which will see tariffs in place to protect British farmers Getty Business news: In pictures Fingerprint payment NatWest is trialling a new bank card that will allow people to touch their hand to the card when paying rather than typing in a PIN number. The card will work by recognising the user's fingerprint NatWest/PA Wire Business news: In pictures Mahabis bust High-end slipper retailer Mahabis has gone into administration. 2 Jan 2019 Mahabis Business news: In pictures Costa Cola Coca-Cola has paid £3.9bn for Costa Coffee. A cafe chain is a new venture for the global soft drinks giant PA Business news: In pictures RIP Payday Loans A funeral procession for payday loans was held in London on September 2. The future of pay day lenders is in doubt after Wonga, Britain's biggest, went into administration on August 30 PA Business news: In pictures Musk irks investors and directors Elon Musk has concluded that Tesla will remain public. Investors and company directors were angry at Musk for tweeting unexpectedly that he was considering taking Tesla private and share prices had taken a tumble in the following weeks Getty Business news: In pictures Jaguar warning Iconic British car maker Jaguar Land Rover warned on July 5, 2018 that a "bad" Brexit deal could jeopardise planned investment of more than $100 billion, upping corporate pressure as the government heads into crucial talks AFP/Getty Business news: In pictures Spotif-IPO Spotify traded publically for the first time on the New York Stock Exchange on Tuesday. However, the company isn't issuing shares, but rather, shares held by Spotify's private investors will be sold AFP/Getty Business news: In pictures French blue passports The deadline to award a contract to make blue British passports after Brexit has been extended by two weeks following a request by bidder De La Rue. The move comes after anger at the announcement British passports would be produced by Franco-Dutch firm Gemalto when De La Rue’s contract ends in July. The British firm said Gemalto was chosen only because it undercut the competition, but the UK company also admitted that it was not the cheapest choice in the tendering process. Business news: In pictures Beast from the east economic impact The Beast from the East wiped £4m off of Flybe’s revenues due to flight cancellations, airport closures and delays, according to the budget airline’s estimates. Flybe said it cancelled 994 flights in the three months to 31 March, compared to 372 in the same period last year.

The report calls for remuneration committee chairs to be expected to resign if their proposals do not receive the backing of 75 per cent of voting shareholders. Again, that sounds like a good idea, but it might actually serve as a disincentive to big shareholders to vote against executive pay awards.

Institutional shareholders are notoriously reluctant to be seen to be booting directors out and creating “instability” on boards. I worry that they might think twice about voting against pay awards if they were aware that their votes could lead to the remco chair being booted. It needlessly complicates the issue, when an annual binding vote is the simplest answer.