Post-Brexit - the need for a more inclusive approach to UK corporate governance?

Workshop held on Wednesday 2nd May 2018 9.30 - 4.00 at the ICAEW, Chartered Accountants’ Hall, organised by Emeritus/Visiting Professor Pauline Gleadle (University of Westminster and The Open University).

Rationale for the workshop: With the increased polarisation of UK public opinion post-Brexit and in the wake of yet more major business scandals, the workshop addressed the issue as to whether a more inclusive approach to UK corporate governance might be necessary? Here, inclusivity was defined as involving the active consideration of a wider range of stakeholders than has traditionally been true of UK corporate governance. Mirroring these concerns, the workshop included presentations which both reflected diverse stakeholder viewpoints (e.g. the board of directors, employees, unions) and incorporated a range of disciplinary perspectives (e.g. Law, Business Ethics), so providing a forum for informed debate.
 
After reflecting on the day’s presentations, participants considered the following questions:

1. What is the evidence as regards the aim of achieving greater inclusivity in UK corporate governance?

2. What further research in this area is necessary?

3. What would an agenda for the future look like, including for the role of research in policy?
 

Key findings were as follows:

1. What is the evidence as regards the aim of achieving greater inclusivity in UK corporate governance?

A key problem relates to the many different definitions of inclusivity.

Paradoxically, even with apparently successful outcomes as with the Davies Report, there are likely to be unanticipated effects (Emeritus Professor Laura Spira, Oxford Brookes). Such unanticipated outcomes were highlighted further in Dr Scarlett Brown’s (Tomorrow’s Company) presentation on the Davies Report, which included the creation of new elites and power bases.

The VW emissions scandal spotlights again the importance of embedding ethical values into company culture, the role of the board of directors in providing adequate oversight, and the need for auditors to challenge statements that directors make in company reports (Dr Christopher Moon, Middlesex University).

With regard to the theory (Emmeline Cooper, University of Westminster) and actual successful use of employee directors, Professor Michael Gold (Royal Holloway University of London) argued that reinforcing mechanisms such as trade union support were necessary as well as a high level of trust on all sides.

Finally, it was agreed that whilst particular inclusivity-based initiatives were to be encouraged, boards of directors need to be able to exercise discretion (Dr Georgina Tsagas, Bristol University and Anthony Carey, Mazars).
 

2. What further research in this area is necessary?

More careful research, ideally of a longitudinal nature, as to images of diversity promoted by organisations, relative to perceived ‘reality’ behind the scenes.

Case studies into the trade-off between influence versus incorporation in the case of employee directors, and engagement with the challenges that senior management perceive with their introduction (Professor Michael Gold, Royal Holloway University of London).

Research into the dynamics and outcomes of narratives of experts as in 2018 USS pensions strike by UK academics (Amanda Williams, University of East Anglia). The phenomenon of expert knowledge is particularly relevant to the case of employee directors who may find themselves unable to challenge apparently complex financial matters because of their lack of expertise in financial engineering, actuarial judgements etc.


3. What would an agenda for the future look like, including for the role of research in policy?

One major problem lies in the fact that corporate governance is rarely discussed across disciplinary silos, with the current workshop being something of an exception to this rule. We would like to encourage the ICAEW in its future efforts to promote such cross-disciplinary debates.

Finally, we asked ourselves whether as a group, we were talking to the wrong people?

Should we be talking instead to campaigners who influence policy-makers?
 
 
Any feedback welcome.
 
 

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