Ten Years On: Rising Voices For Accountable Capitalism
Eight years after the financial crisis the United Kingdom was derailed by the shock referendum decision to leave the European Union. Ten years after the financial crisis there is an acute danger that the relentless simmering of Brexit has become a dangerous distraction from the fundamental need for economic reform for a fairer and more cohesive society. If the vote taught us anything, it must surely be that addressing this challenge is long overdue.
Britain is not alone in the need to rethink the workings of capitalism. This post is simply intended to bring together a few of the excellent ideas that has been put forward for change, and it is here because of its implications for business and its boardrooms.
Just over two years ago in the wake of that Brexit vote, we had the first surprise mention of the idea of putting workers on UK plc boards by Theresa May, then British Home Secretary, as she launched her Conservative party leadership campaign. Since then it has been lurking in the background like the guest with gauche behaviour at an august occasion intended for the great and the good. The invitation was made, but his/her presence is unwelcome and everyone rather hopes she will leave soon.
But that’s not the way the broader thinking is going. In the United States, amid the reality of tax cuts for business, a surge in share buybacks and real wages falling, Senator Elizabeth Warren (Democrat, Massachusetts) has introduced two new pieces of legislation - the Accountable Capitalism Act to give corporate wealth back to workers and the Anti-Corruption And Public Integrity Act to stem the influence of lobbying.
You can listen to her talk about both in this excellent podcast.
The idea of giving workers a much greater say in how business operates is being picked up with many hands on both sides of the Atlantic.
The final report by Britain’s non-party-political think tank IPPR’s Commission on Economic Justice - with its impressively broad ranging commissioners, is out, and speaks loud and clear. It’s a must-read. Here’s their compelling video on the need for change.
At a parliamentary launch of the report last week hosted by Liam Byrne MP which I attended, Michael Jacobs, Director of the Commission, gave a fast-paced summary rather impressively, continuing undeterred over the shrill sound of the Division Bell. I thought that was a nice touch. Among other things, he said: “We believe it is time to legislate for workers to be placed on company boards and on remuneration committees.”
There are now so many clever thinkers across industry sectors calling for “inclusive growth” that people are beginning to find it hard to put the same ideas in different ways to catch attention. Going back to the United States, Cornerstone Capital, investors I first covered on Forbes way back in 2014, have just come out with a new report.
“Wealth inequality among racial and ethnic groups in the United States results from structural racism dating to the beginning of the republic. Investors can contribute to the narrowing of economic disparities through a dedicated emphasis on investing in under-served minority communities” it says.
Here’s a link to their report, Investing to Advance Racial Equity. The United States has a much longer history in being able to talk about race and ethnicity than we do here in Britain - and on that, watch out for the next Board Talk.
There are many events around this theme of inclusion coming up in London. Among them, one to note is being held by the Centre for Progressive Policy (with which I have an affiliation) on October 30.
As we hurtle towards the end of a year of frustration for the UK in 2018, it’s quite clear that action needs to be taken on many fronts, for better lives for everyone. As considered in the last Board Talk, the ramifications of doing nothing could be undetected and unseen, but result in a downward spiral.
Again, the varied nature of the voices in this debate is worth noting. I write a fortnightly Governance Watch for a boardroom consultancy, where I have mentioned this tweet before. It’s not from a progressive think-tank, but from a profession whose role in corporate life and standards is also in crisis - accounting. It’s Sacha Romanovitch, the CEO of Grant Thornton UK.
Photo credit: My photograph, also the Board Talk image, taken in Khajuraho, India some 10 years ago. The female mahout covers her eyes, the elephant is about to step on a man and crush him.
