I have carefully read Larry Elliott’s piece (The inevitable collapse of Arcadia is a cautionary tale for British capitalism, 2 December). He cites the overwhelming significance of “short-termism” and other abuses as part and parcel of the general British problem. Arcadia is cited as a particular example of systematic abuse of corporate stewardship. But what is strikingly absent is any mention of the fundamental underlying cause of this malaise – executive-dominated unitary boards in Anglo American jurisdictions – and the fundamental failures in corporate governance they encourage.
As with so much else, we seem to be unaware of how corporations are governed in other jurisdictions that yield far superior results for investors and other stakeholders. Have a look at how Germany runs its businesses. Independent supervisory boards are mandatory. The independent supervising directors are there to oversee what the executive directors are up to. The scandal of Arcadia could not have arisen with that level of corporate governance. Over many decades their form of corporate governance has generated a positive stakeholder-oriented culture. We need to understand how it works if abuses in Britain are to be prevented.
Richard Tudway
Principal at the Centre for International Economics
• Larry Elliott says “Philip Green wasn’t much cop at capitalism”. On the contrary, he was a very successful capitalist. He has accumulated more wealth from his asset-stripping ways than he can possibly spend in his lifetime, at the expense of those who work for him on the one hand, and of the British taxpayer on the other. As a capitalist, why should he care about the continuity of the business now, or the welfare of its employees, as long as his nest is feathered?
Fiona Monroe
London
• Zoe Wood’s explanation of the demise of Debenhams (Report, 1 December) – “private equity” puts in £600m in 2003, takes out £1.2bn and leaves Debenhams with £1bn of debt by 2006 – misses only one thing out: how did the business manage to carry on for another 14 years to 2020?
Our financial world really needs sorting out. The short-term capitalists don’t invest. They asset-strip and it’s all legal. When they’ve worked through the big retailers, what will be next? We need a complete reform of our financial services, from the stock exchange to the tax system. Capitalism isn’t working, as Debenhams employees will tell you.
Steve Lupton
Manchester
• One feels desperately sorry for all the people in Arcadia and Debenhams, as well as the many thousands of other employees in the service and retail sectors, who have or will lose their jobs. The bankers, hedge fund managers and lawyers – not to mention the Green family – will be awash with their dubiously earned gains while the hard workers suffer.
Additionally, what the economic pain of both Covid and Brexit highlights is the foundationless sand on which our modern economy is built. Shops, pubs and restaurants, beauty salons, gyms and delivery companies employ increasing numbers – often on minimum wage or zero-hours contracts – while the “proper” jobs in manufacturing, construction and agriculture are decreasing, sold off over the last 40 years on the altar of a quick buck.
The government keeps sweet-talking us with promises of green manufacturing jobs and affordable housing, but until those words are turned into actions I fear that job losses are set to continue.
Alistair Wood
Oswestry, Shropshire
