Government must be smarter and bolder on business reform, by learning from co-ops and helping them grow.
Commentators are increasingly sceptical about the degree of substance underpinning the Prime Minister’s declared ambitions to create an ‘Inclusive Economy That Works For Everyone’. Corporate Governance Reform was presented as a flagship part of this agenda. From the outset many co-ops liked the sound of the ‘workers and customers on boards’ rhetoric. Back when we first heard this in the immediate aftermath of the Brexit vote, we welcomed the new urgency in British politics to deliver the economic and social change so many people clearly want. And we thought co-ops could be part of that change.
So we were disappointed to see the government’s ambitions diminished in the publication of the Corporate Governance Reform green paper. Putting workers on boards has had some highly influential detractors, who’ve argued it is too complicated and not impactful enough. Thus its now presented as one among a number of options for companies and won’t be mandated or encouraged through any changes in the law.
But the fact is businesses can behave better when they have workers and other stakeholders as directors, and it doesn’t have to harm their bottom line either. In the UK co-ops have demonstrated how to make this work for more than 150 years. Rather than backing down on this government should make the effort learn from successful co-ops here and around the world. That’s one of the recommendations Co-operatives UK is making to government in response to its Corporate Governance Reform green paper.
Our other call on government is to be both bolder and smarter it is attempts to make business better and our economy more inclusive. While the top-down statutory interventions mooted in its green paper could make improvements at the margins, the Prime Minister’s ambitions for a more Inclusive Economy will not be met until her government recognises and supports an existing movement of thousands of co-ops that, by their very nature, spread ownership, opportunity and wealth.
In our view part of the problem is that, on top of Brexit and everything else, this government has made its Inclusive Economy ambitions even harder to achieve by ignoring what already works. It could turn this around, starting with our recommendations on Corporate Governance Reform.