A major re-think of corporate governance is needed to improve transparency across UK executives’ pay ahead of Britain’s departure from the EU, according to a new report.

The Chartered Institute of Personnel and Development (CIPD) – a professional body for human resource development – and the High Pay Centre – a think tank that specialises in research and analysis on issues relating to top incomes – said on Friday that if FTSE 100 chief executive pay continues to increase at the same rate for the next 20 years as it has for the last two decades, the average ratio between CEO and average pay would increase from about 129:1 to more than 400:1.

The comments come in response to a Government green paper, which seeks views on how to curb excessive executive pay and help employees to make their voices heard at board level.

Peter Cheese, chief executive at CIPD, said the green paper is an “opportunity” for UK firms to lead the way in post-Brexit Britain.

“Current levels of executive pay undermine both trust and sustainability. Fiddling around the edges of the current system won’t provide the solutions we need for an innovative, productive and leading economy,” Mr Cheese said.

The steep increase in pay and bonuses for FTSE 100 executives is in stark contrast to the fortunes of average workers, who have seen their living standards stagnate as a result of slow earnings growth since the financial crisis.

“In our view it’s very hard to justify very high pay for executives if it is unconnected to the organisation’s culture and the rewards, contribution and performance of the wider workforce,” Mr Cheese said.

Stefan Stern, director of the High Pay Centre, said: "We need to change the nature of the conversation on pay at the top if we want to bring about better outcomes. This can be done by introducing the mandatory publication of pay ratios, and by bringing employee representatives on to the Remuneration Committee.”

Top bosses earned more by midday on Wednesday 4 January than the typical workers earn in a year, an analysis by the High Pay Centre concluded last month.

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The High Pay Centre's calculation assumes that the executives work 12 hours a day, most weekends and take fewer than 10 days holiday a year.

Prime Minister Theresa May has said that tackling corporate excess is a priority for her government. It is currently looking at whether to force companies to introduce pay ratios, which would show the gap in earnings between the chief executive and an average employee.