Opinion: Retailers must face up to axe-grinding MPs or risk their reputation

After scoring hits with Sports Direct and BHS, high-profile Labour MP Iain Wright and his BIS committee have their sights set on the issue of how companies operate, their pay rewards and the gender imbalance in senior positions.

This latest probe has a remit covering the wider corporate world.

But with thoughts of Sir Philip Green, Dominic Chappell and Mike Ashley fresh in their minds, MPs will undoubtedly drag retail back into the spotlight.

Some retailers will feel uncomfortable about this scrutiny.

MPs are frequently regarded as an egotistical, grandstanding bunch. Admittedly, Wright fuelled this fire by referring to the BHS report as “my Sgt Pepper” – in reference to the legendary Beatles album. In essence, they have a profile to maintain.

Nevertheless, retailers must take note.

With thoughts of Sir Philip Green, Dominic Chappell and Mike Ashley fresh in their minds, MPs will undoubtedly drag retail back into the spotlight

PR Power

Like it or loathe it, parliamentary select committees now have incredible PR power. Though their recommendations can be ignored by government, the BHS and Sports Direct sagas prove they are easy fodder for headline writers.

And people power has never been stronger, thanks to social media.

Instead of fearing the scrutiny, retailers must get on the front foot to take the initiative.

If there’s one thing that can be learned from the Green fiasco, who has now been “Sir Shifty” by the tabloid press, it is that failing to face up to the problems is like a red rag to a bull.

There is no escaping the fact that executive pay at some of the biggest retailers is eye-watering compared to the remuneration of shop floor staff. A shake-up at some firms over pay because of the living wage has also added to this feeling of unfairness.

Retail reputation

However, retailers have the opportunity to push the fact that, on the most part, the industry is strongly meritocratic. Some of the biggest names in retail right now – Steve Rowe, David Potts, Nigel Oddy – started out on the shop floor.

Yes, they are well rewarded, but it has been achieved through a career of hard work.

MPs will also look at whether there should be more women on executive boards.

Again, retailers may fear the scrutiny because women make up 60% of retail’s workforce but only 10% of executive boards. There is no excuse for this, yet there is an opportunity to address the issue.

Retailers may fear scrutiny because women make up 60% of retail’s workforce but just 10% of executive boards. There is no excuse for this, yet there is an opportunity to address the issue

Essentially, changing the balance not only makes sense for reasons of equality - it also makes business sense. If the majority of retail’s customers are women it stands to reason that they should be better represented on boards.

So, as evidence begins to flood in to Wright’s committee, retailers must prepare themselves for what could be another onslaught.

Undoubtedly, there will be some companies that get caught in the crosshairs of the probe. But by showing they are trying to the do right thing, retailers can avoid another showdown with publicity hungry MPs.