Sunday, 12 June 2011

Blairite guru vs shareholder-focused governance

OK, slightly cheeky way to label him, but...:
In principle I can see little to be said for the present law. It gives to shareholders, and to shareholders alone, the right to appoint directors, and to receive and approve the company's accounts. This right they possess because they, and they alone, are legally 'members' of the company by virtue of owning shares. No legal responsibility exists towards the workers, the consumer or the state; and none of these has any legal rights.

This seems a somewhat unreal position. It can hardly be denied that industry is in practice a joint enterprise in which management and workers participate as well as shareholders, and indeed participate rather more actively; and the law, by investing shareholders alone with legal rights, does not merely fail to reflect the reality - it turns it upside down.
This is from the chapter on the structure of private industry in The Future of Socialism. Notably he goes on to argue that worker-focused governance reform through amending company law - for example to enshrine employee directors - probably isn't worth the effort because the gains might be limited and, in any case, the unions already have power within companies. Given that the latter isn't really true any more, what would Crosland say in 2011?

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