Britain鈥檚 answer to angry voters
Both the American election campaign and Britain鈥檚 vote to leave the European Union (鈥淏rexit鈥�) have revealed deep voter concerns about the effects of globalization on jobs and incomes. Trust in big business has eroded, forcing politicians to respond. Hillary Clinton and Donald Trump each promise radical changes on issues such as trade and finance.聽
In Britain, however, a new prime minister, Theresa May, has taken office since the Brexit vote in June. She is already acting on worker concerns. Her most radical idea: Put employees on company boards in order to 鈥減ut people back in control.鈥�
Ms. May does not fit the stereotype of a free-market Conservative. She would like Britain to adopt the idea of 鈥渨orker directors鈥� 鈥� a concept already practiced in countries such as Germany, Sweden, and France 鈥� in order to restore trust in the corporation. She views corporations as a society of stakeholders, from employees to consumers to local communities, and not merely as entities beholden to stockholders.
Conservatives, she says, 鈥渄on鈥檛 just believe in markets, but in communities. We don鈥檛 just believe in individualism, but in society. We don鈥檛 hate the state; we value the role that only the state can play.鈥澛�
In the United States, such ideas have long been espoused by some conservative Democrats and liberal Republicans. Yet too often they have faltered because of each party鈥檚 polarizing plays for power. Under Britain鈥檚 parliamentary system, which combines legislative and executive powers, May can more easily implement her ideas.
But will this change in corporate governance bring the kind of sustainable growth and shared profits that she envisions?
On the Continent, the record is mixed when corporate boards include worker representatives, according to a study by Bloomberg News. In Germany, where the practice has existed for decades, more companies are finding ways to avoid the practice. Some European companies do worse in the marketplace when they share strategic governance with workers.
Much of the success in worker directors depends on how they are chosen and how well they are trained. The idea is designed to signal that workers have a stake in 鈥渢he system.鈥� It can drive a longer-range view of a company鈥檚 future and its sustainability.
If May鈥檚 idea is done well and those implementing it learn from Europe鈥檚 mistakes, she might be able to restore trust in today鈥檚 globalized economy. She said the people of Britain voted for 鈥渟erious change.鈥� Her change would not break up corporations. Rather, it would bring companies and the people they serve back together.
