Tuesday, 8 July 2014

Economists, trade unions and City chiefs slam financial sector corporate governance


British finance told to ditch its obsession with short-term returns and recognise workers’ contribution to the economy, writes CONRAD LANDIN in the Morning Star

Economists, unions and City chiefs have joined forces to press the finance sector to ditch its obsession with short-term returns and recognise workers’ contribution to the economy.

In new book Beyond Shareholder Value, TUC leader Frances O’Grady joins the Fabian Society’s Andrew Harrop, the Institute of Directors’s Roger Barkers and others in slamming the City’s current system of corporate governance.

Proposals include tightening rules for takeovers and changing taxes to encourage longer-term share ownership.

The writers call for a move away from shareholder value, the practice of measuring companies’ success on the basis of how much shareholders are enriched. 

Ms O’Grady said it was clear that the clear that the “appetite for reform is growing from across business, workers and wider society.

“Corporate governance may be considered a niche issue best left to the City. But when the prize for a more rational system is sustainable economic growth with more jobs, higher incomes and greater profits, it’s an agenda that should command support from across the political spectrum.”

Left Economics Advisory Panel’s Andrew Fisher, author of The Failed Experiment, called for more radical workplace reforms to the corporate system. 

He said: “The failure of corporate Britain to generate high-skilled, well-paid, secure jobs as part of a stable economy is in large part due to the growing imbalance of power — with tax changes, deregulation, liberalisation and weakened trade union rights all contributing.

“We need to empower workers to democratise their workplaces with new economic rights — including to co-operativise their company on a straight vote. We need to euthanise the rentier.”

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