Partner Article

Business ownership needs an overhaul

Britain needs to improve the way its businesses are owned in order to create higher long term economic growth, the Ownership Commission has suggested.

Chaired by Will Hutton, the Commission has been a two year undertaking, and suggests the Government should provide greater plurality in corporate ownership, better stewardship of companies and great engagement of employees and shareholders.

It argues that UK business is dominated by the PLC as a default form, yet private, family and employee owned firms and mutuals provide more opportunity to deliver different business models and promote economic resilience.

Shareholders, trustees, investment management companies and directors should also have wider responsibilities to allow for better stewardship, the report says.

Mr Hutton said: “The financial crisis and the protracted problems in its wake has opened up the debate about how well our economy is owned, run and managed.

“Good ownership is indissolubly linked to good capitalism. The golden thread running through all our proposals is that the route to good ownership is better to connect citizens either through the institutions that invest in their behalf or as individual shareholders or as consumers and workers with their companies.

“The heart of good ownership is engagement and stewardship expressed through as many ownership forms as possible.

“Britain will have a better performing and more resilient economy the more seriously it can develop better ownership – as important for the public as the private sector. We offer this report as our contribution to a vital national debate.”

CBI Chairman, Sir Roger Carr, said: “The Commission has proved an excellent forum for an objective review of the strengths and limitations of a wide range of ownership models.

“It is hoped that the recommendations will make a valuable contribution to both their effectiveness and stewardship in assisting growth in the United Kingdom.”

John Lewis Partnership Chairman, Charlie Mayfield said: “At JLP we seek to balance the interests of our Partners (employees), our customers and our suppliers to achieve long term commercial success.

“The Ownership Commission’s report brings together vital evidence that supports the importance of “good ownership” in its various forms and sets out the rationale for appropriate intervention with proposals that have far-reaching implications for the UK’s corporate culture and performance.

“In particular, I welcome the call for Government to promote a greater plurality of ownership and I see employee owned businesses playing a key role within that agenda.”

Co-operative Group CEO, Peter Marks added: “The financial crisis has shown us how important it is that the businesses we rely on for growth, employment and wealth generation are well managed.

“We have also seen how differently owned firms responded to the risks and challenges of the economic turmoil.

“This report shows how we can learn from this and ensure that UK business is better placed to build a prosperous future.”

This was posted in Bdaily's Members' News section by Tom Keighley .