By Prof Charlotte Villers, Professor of Company Law, and Ms Nina Boeger, Senior Lecturer in Law (University of Bristol Law School–Centre for Law and Enterprise).
Our corporate landscape has relevance for our post-Brexit future. Yet deep public distrust exists not just with regard to our politicians but also with regard to business. Recent debacles involving the now defunct British Home Stores and Sports Direct are just the tip of the iceberg in what is widely seen as a broken economic and political system that has given precedence to the leading market actors.
Corporate governance is the key means by which global wealth is distributed but that wealth is not distributed fairly. Two stakeholder constituents are prioritised: boardroom directors who frequently enjoy eye-watering pay and perks, and shareholders, at least in theory, through the profit maximisation imperative. Both groups have focused on making a quick buck rather than the long term interests of their companies. Workers, at the bottom of the corporate hierarchies, have little chance of improving their means of living and face greater levels of insecurity in their working and home lives. Workers further down the supply chain risk their lives trying to scratch a living in countries only too glad to gain trade from the powerful multinationals. Consumers lose out as product quality and services are whittled down and the environment, as a natural resource constituency, barely gets a look in. (more…)