I managed to get along to a meeting of the New Political Economy Network recently on rebalancing the economy. Of most interest was the discussion of corporate governance that emerged as part of the debate. It struck me that the moderate Left (ie broadly Labour) still hasn't quite made up its mind where it wants to be in this field, and I can understand why.
My old boss Brendan Barber from the TUC argued that the UK's current approach to governance - with shareholders the principal player - risks being undermined. Fund managers - rather than beneficial holders - aren't accountable for or transparent about their ownership activity, and the rise of short-term investors means that people who hold shares for a very short time can determine the fate of companies which have been around for decades.
Shadow BIS minister John Denham picked up on this and said he was quite taken with Myners' characterisation of the 'ownersless corporation' and the implications that this had. Obviously this is the problem that initiatives such as the Stewardship Code are intended to address.
But arguing back in the other direction was Karel Williams, who broadly argued that the power of interest groups within the investment chain make it optimistic to put too much weight on corporate governance as an avenue of reform.
These three perspectives do to some extent encapsulate the problem. Does the Left seek to work through the existing governance system in order to encourage more responsible corporate behaviour, or is a different approach required? In the period I've been involved in this stuff I have leaned overwhelmingly to the former. This is because a) Labour was doing a lot to try and make it work (right up to the 2010 election) and b) an acceptance, rightly or wrongly, that this was a more 'realistic' route and c) because I'm not anti-market.
However in the wreckage of the crash you can see why it is tempting to wonder whether a change of direction is called for. After all despite all the shareholder-focused governance reform in the UK we still see bad failures, and the continuing escalation of executive rewards. I'm not at all surprised to see the resurgence in interest in other governance models in this light.
The question I would pose is that of the trade-off. We give up a lot of territory in accepting the shareholder-focused model, do we gain enough in return to make trying to make it work for our ends worthwhile? Obviously it's not an either-or question, but it does make you think about how resources are best deployed.