The problem as you correctly identify in your editorial (22 November) is that the employee-director argument goes to the heart of what and whom a company is run for. Getting the right sort of answer to that is vital to knowing how best to reform corporate governance. As you remind us, Lord Bullock in his report in the 1970s concluded that viewing a company as the exclusive property of shareholders is out of touch with the company as a complex social and economic entity. Nearly half a century on and we are still unable to face the implications of this argument.
Britain is one of the only remaining large nations in Europe that has failed to recognise the importance of reforming corporate governance. But that needs more than a decision to appoint employee-directors. Little will change within the unitary or single board structures dominant in Anglo-American jurisdictions. The changes can only be realised within a structure of independent supervisory boards, supported by enforceable directors’ duties.
We are ensnared by the one-size-fits-all company structure. More complex governance arrangements are probably suitable only to larger companies. If experience elsewhere in Europe is a guide, reforms will enable us to address many of the governance issues that currently face us.
Richard Tudway
Author, The Looming Corporate Calamity, Burgess Hill, West Sussex
• Your editorial suggests that a “boo” from the CBI was enough for Theresa May to backpedal on her promise to include workers on company boards. But why should she do that? Labour and the Scottish Nationalists would have backed her and surely enough of her own party, so what had she to fear from the CBI? Withdrawal of support? Switching support to Labour? Forty years of the practice in Europe has shown its benefits. Instead of learning from the experience of successful economies and societies, the prime minister falls at the first hurdle in making things better for ordinary people.
James Sloan
Pulborough, West Sussex
• Your editorial rightly condemns the abandonment of Theresa May’s proposals to require employee representatives on company boards. Her rethink on a hugely expensive nuclear programme didn’t last long, either. And her loudly proclaimed wish for a fairer Britain has seen only modest trimming of Osborne’s harsh plans and some major setbacks (on grammar schools, for example). No one should be surprised if the balance of future proposals greatly favours the better off.
Graham Dunn
Chorley, Lancashire
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