How to shame those overpaid executives British capitalism can permit itself one cheer. The recent clear-out of a clutch of overpaid, underperforming chief executives is good news for the market economy. This rare assertion of shareholder power, however, is scarcely grounds for complacency. Along with greater accountability, the nation's boardrooms need to rediscover some basic ethics. Vince Cable, the business secretary, plans to give the process a nudge by legislating for binding shareholder votes on directors" pay. The measure should embolden the investors who have recently claimed some high-profile scalps at Trinity Mirror, Aviva and AstraZeneca. If the market is to work properly, however, the revolt must reach beyond the most egregious examples of corporate excess. For all the self-serving guff talked about competition for "talent," pay and bonuses have been ratcheted ever upwards by self-sustaining cartels of executives and remuneration committees. This is what the Free Enterprise Group of Tory MPs has aptly called crony capitalism. The problem is not only one of executives leading their businesses into the corporate casualty ward. The culture also permeates companies throughout and beyond the FTSE 100. Leaders of middling companies turning in unexceptional results routinely reward themselves with multimillion pound pay packets. John Plender, my Financial Times colleague, has a brilliant phrase for the phenomenon - entrepreneurial rewards for bureaucratic performance. A less charitable description would say these people are looting their businesses. In this heads-I-win, tails-you-lose world a chief executive can pick up, say, £2m in a bad year and £5m or £6m in a slightly better one. Shareholders and politicians must shine a much brighter light on these companies. The effort should start with two simple measures to increase transparency and to frame pay levels in the context of wider society. The first, which should be included in Mr Cable's legislation, would require chief executives to make a personal statement at the front of the company annual report. The statement would set out in plain English the total in pay, bonuses, incentives and benefits in kind the CEO had received for the relevant year. It would measure these against short- and medium-term company performance - earnings per share, dividends, the share price and the like. The chief executive would then bring the two together to justify his or her pay. This would be countersigned by the head of the remuneration committee. The whole thing need not run to more than a single sheet of A4. It is hard to see how anyone could object. Yet it is also a safe bet that the prospect of shareholder and public scrutiny would encourage chief executives to think harder before demanding big rewards tied only tenuously to performance. The second measure would further extend accountability by giving an oversight role to MPs. Each year, the Treasury committee, or perhaps the business, innovation and skills committee, would schedule hearings with chief executives to discuss the level of boardroom remuneration. Invitations would be sent to a cross-section of the richly rewarded but "bureaucratic" performers as well at those at the very top of the pay tree. The focus would be exploring the spread of the something-for-nothing culture more commonly associated with benefit cheats. If MPs were short of names for their first hearing, I would be happy to supply some suggestions as to who might be at the front of the queue. The purpose would include the public shaming of those unable to justify their pay packages. Businesses cannot expect to operate outside the ethical framework of the societies in which they operate. Nor can they buy an exeat by setting up corporate responsibility departments. We have seen with the banks, where excessive pay and bonuses are rooted in taxpayer subsidies, that some chief executives are utterly shameless. Public policy should be directed both at empowering shareholders and at channelling public opprobrium towards those who spurn the link between remuneration and performance. Society is rightly tough on welfare scroungers. It should be ready to afford the same pariah status to the underperforming executives who rig capitalism to fill their pockets.