Swiss aim to tackle high pay through shareholder democracy

You scratch my back, I'll ask the shareholder remuneration committee to vote to scratch yours.

Switzerland has followed the EU and implemented laws designed to curb high pay. But whereas the EU implemented a hard cap which only affected bonuses in the banking industry, the Swiss plan is both more wide-ranging and less heavy-handed in how it operates.

The key change is a requirement that companies give shareholders a binding vote on executive pay. Currently, pay is set by companies' boards, but now that the Swiss people have spoken, in a referendum which achieved a 68 per cent "yes" vote, one of the highest in the country's history, that is going to change.

The move will fight the so-called principal-agent problem, which is common throughout business and politics. In theory, shareholders entrust the board to make the right decisions on executive pay; if higher pay will lead to more value for the shareholders, perhaps by encouraging the best candidates, then the board should support it, but in most situations, the board should endeavour to keep costs down. Unfortunately, while the board members are entrusted by the shareholders to act in their interests, board members also have their own interests — which may conflict.

In this situation, the classic conflict is that a board member for one company may well be an executive for another, and vice versa. They end up in the situation where they are making decisions about the pay of people who make decisions about their pay, and it's not hard to see how that could result in pay going through the roof.

But handing control over to shareholders doesn't remove all principal agent problems. It all depends how institutional shareholders decide to act — and there's reason to believe they may not be much better. If you invest in a pension fund, you technically own several companies. But the right to vote on how those companies are run — and now, in Switzerland, on how much those companies' executives are paid — is held by the pension fund.

Such funds tend to be uncomfortable about exercising too much shareholder democracy. Partly, this is because they fall prey to the same problem that boards do: the executives who decide how to vote have their pay set by other executives voting on remuneration committees, and the whole backscratching saga continues only slightly abated.

But it is also a matter of privilege and viewpoints. Even if there is no chance of reciprocity, a highly paid financial executive is likely to have very different views on the appropriate level of pay for other highly paid financial executives compared to you or I. For shareholder democracy to really deal with high pay in the boardroom, it would need either a massive resurgence in private investors (not the best idea, since that would likely also result in a huge upswing in private investors losing all their money in the stock market) or institutional investors devolving much more say to their members.

The other requirements set by the Swiss referendum are likely to have more direct effects. In requiring annual re-elections for directors, they remove much of the inertia that can keep people in these extremely well-remunerated, largely ceremonial positions for years beyond their time. And in explicitly banning "golden hellos" and "goodbyes", the practice of awarding a large lump sum upon joining or leaving a company, they create a much more stable and manageable system of pay for the shareholders to oversee.

But fundamentally, tackling high pay — and by extension, inequality — requires tackling the fact that the rich choose how much to pay the rich. The best proposal to do that is something similar to the suggestion that employees ought to have a place on the company's remuneration committee. After all, they have just as much interest in the company being run well, because their jobs depend on it. But they also bring a viewpoint which is sorely lacking in these discussions, whether they are being held in Switzerland or Britain.

The city of Montreux, Switzerland. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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How gendered are this year’s most popular Christmas present toys?

Meet the groups fighting back against the gendering of children’s toys over the festive season.

You’re a young girl. You go into WH Smith’s to pick out a colouring book for Christmas. You could buy the Girls’ World Doodling and Colouring Book, a "gorgeous gift for any girl". In this, the pictures range "from flowers, fans, feathers, to birds, buttons and butterflies". Or Colouring for Girls: Pretty Pictures to Colour and Complete, where you can colour in "beautiful birds, seashells, cupcakes, pretty patterns and lots more". The counterpart Boys’ Colouring Book has a range beyond buttons and feathers: "Planes, trains and automobiles – plus the odd alien spacecraft".

In the run-up to Christmas, this kind of gendered marketing is rife, particularly finding its way into the predominantly pink colour scheme of girls’ toys.

Take Amazon’s page "2016 Toys for Girls": a pink icecream trolly set, a pink light-up tablet, pink building blocks, pink and purple friendship bracelets and so on.

There are several groups taking action against the "pinkification" of children’s toys. One of these is Let Toys Be Toys, a group that targets large supermarkets with the aim of reducing the gendered marketing used on children’s goods.

The Let Toys Be Toys blog focuses on specific examples of targeted gendering within shops, catalgoues and online. A particularly revealing example of how prevalent this has become in recent years is in two pictures published from the Argos catalogue, one from the Seventies, and one from nowadays. The eye-wateringly pink page from now makes the 1970s page look dour by comparison. The lack of change over four decades of what kind of products are marketed at girls is equally striking:

Despite the efforts of campaign groups such as Let Toys Be Toys, the prevalence of gendering within the highest-rated children's gifts for 2016 is staggering.

Look no further than the Ultimate Christmas Gifts Guide from Toys R Us. One of the most immediately obvious examples is the way in which the pink/blue colour schemes are used to market identical products. This is repeated again and again:

This identical drawing board is uniquely packaged to the binary colour codes that are so common within children's toys stores.

The same applies with this keyboard, where the young girl and boy are pictured almost identically, save for the coordination of their clothes to the colour of their toys.

The message is a hugely limiting one: one that allows little movement away from the binary of pink/blue. The effects of this are longstanding. A recent poll from YouGov shows that "only a third of parents approve of boys playing with Barbies". The data goes on to explain that "while most parents approve of girls playing with toys marketed to boys, a minority of adults approve of the opposite".

Images like this were the inspiration behind Let Toys Be Toys, back in 2012. The campaign began on Mumsnet, the forum for parents, on a section called "AIBU", which stands for "Am I Being Unreasonable?". One parent posted the question: "Am I being unreasonable to think that the gendered way that children’s toys are marketed has got completely out of hand?" The heated discussion that followed led to a sub-section with the founding memebers of Let Toys Be Toys.

This aside, Let Toys Be Toys has made signifcant progess since it began. It targets large stores, focusing on gendered signage both in store and online. In their four years, they have campaigned for signs like "girls' toys" and "boys' toys" to be removed from retailers such as Boots, Debenhams, Morrisons, Toys R Us and TK Maxx. It is the go-to hashtag on Twitter for examples of the often shocking gendering of children’s toys.

"This is ostensibly about toys, but what we’re really talking about is gender stereotypes that shape our children’s worlds in an apparently very unassuming way," says Jess Day, a Let Toys Be Toys campaigner. "It seems very innocent, but actually what we’re doing is giving children very clear instructions about how to be a man and how to be a woman."

These clear instructions work beyond colour coordination: where girls are sold the image of the pink "girly girl", for instance. This is evident in children’s fancy dress costumes. Early Learning Centre’s (ELC) children’s fancy dress range imposes very rigid gender roles. To give examples from the current christmas range:


Credit: ELC

Again, the predominant colour sceme is pink. The roles offered are mainly fairies and princessess: generally make-believe.

“I found it really interesting that there were almost no ads showing girls doing anything," comments Day. "Physically they were very passive. The only physical activity we saw girls doing was dancing. They weren't really moving around much."


Image: ELC

By contrast, young boys are offered the possibility of pretending to be a firefighter, a policeman or a doctor, among other practical, professional roles.

This year's Toys R Us Christmas advert follows on from this, with girls mainly dressed as princesses, and boys dressed as knights and kings. Much like the pink/blue colour scheme that we see all over children's shops, these fancy dress costumes create an unnatural binary. They send out a message that restricts any kind of subversion of these two supposedly polar opposites.

What's more, the subtext is one that is deeply rooted in expectations, building up a picture where careers such as that of a policeman and fireman come more naturally to boys, who have been socialised into these roles from childhood through fancy dress costumes of this type. Instead, girls are later forced to learn that most of us aren't going to become princessess, and none of us fairies – and so the slow process begins to unlearn these expectations.

There are certainly groups who try to counteract this. Manufacturers such as the toy brand IamElemental aims to break down the gendered distinctions between boys' toys and girls' toys, by creating female action figures.

“We always say that we are not anti-doll or anti-princess, but that if you give a girl a different toy, she will tell a different story," says Julie Kershaw, a member of the organisation. "As the mom of two boys, I always say that it’s just as important to put a strong healthy female action figure in a boy’s hand as it is a girl’s”.

Like the campaigners behind Let Toys Be Toys, IamElemental sees children’s toys as the starting point.

“We want kids – both girls and boys  – to internalise these messages early and often,” says Kershaw. “While there are certainly biological differences between girls and boys, gender-specific toys are not a biologically dictated truth. Toys are not “for girls” or “for boys”  – toys are for play; for exploration and creative expression.”

This attitude is ingrained in a child’s early years. Only through reconfiguring the gender sterotypes of the toys we buy for our children can we begin to break down their expectations of how to behave in age. We challenge you this Christmas to avoid these highly gendered products. Below are our three favourite Christmas presents for children this year, for girls AND boys, as approved by Let Toys Be Toys:

Mini Table Tennis (£7.99)


From: The Little Toy Box

Djeco Intro to Origami - Animals (£3.99)

From: Rachel's Toy Shop

Seedling Make Your Own Dino Softie! - Dino(sew)or Kit (£5)


From: Gifts For Little Ones