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Explore the corporate reform and alternative corporate forms in the UK. Discover the challenges and opportunities in shaping the corporate landscape for sustainability, profitability, and social impact.
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Shaping the Corporate Landscape Corporate Reform and Alternative Corporate Forms
Corporate Reform • The last couple of decades has seen several company law and corporate governance reforms in the UK. • The establishment of a comply or explain based corporate governance code and the Companies Act 2006 offered a general framework in which other discrete reforms have been introduced, largely in response to corporate and financial sector failures and scandals. • What we see is the “same old, same old” responses to the problems: increased shareholder rights, attempts to achieve more independent non-executive directors and auditors, more transparency and disclosure requirements, reduction of red tape.
Corporate Reforms • Corporate boards - gender diversity voluntary measures with threat of quotas from Europe and say on pay for shareholders on executive remuneration. Currently FRC has a new Corporate Culture Project aimed at improving the boardroom’s role in aligning corporate behaviour with long term performance • Shareholders’ rights and engagement eg through the Stewardship Code • Accounting – attempts at better disclosure eg Non-financial reporting and the Strategic Report and the FRC’s Clear and Concise Reporting campaign
Key themes of corporate reform • Shareholders • Profit • Disclosure • Boardroom culture • Plenty of talk about sustainability, CSR, stakeholders, workers and long-term performance but it is not clear how these can be achieved in a short-term profit-oriented framework
Alternative Corporate Forms • To what extent is the form of the shareholder corporation itself the problem? • Parallel movement: growth of enterprise forms with social & environmental concerns ‘baked in’. • Emergence of specific legal forms dedicated to social enterprise: asset-locked and mission locked businesses (e.g. B Corps / CICs) • Cooperative sector and employee-managed businesses: better-than-average start-up and resilience rate; diversification; informal aim of 10 per cent of GDP cooperative businesses (Coops UK); regulatory building blocks for further growth in place (e.g. 2014 legislation and new tax incentives); key innovations (e.g. renewable energy).
Alternative Corporate Forms • Social and community-oriented forms of raising capital: community shares; social impact bonds; crowd funding; cooperative banks; ethical banking; social investment (incl. SITR funds) • Development of multi-stakeholder, open and platform cooperatives • Social accounting tools
Key challenges • Profitability, growth and investment • Legal structure and governance (mission drift) • Social impact accounting • Public service commissioning • Awareness and international framework
Where do we go from here? • What can alternative corporate forms bring to the discussion on corporate reform? • Corporate purpose / democracy / property • What role is there for enterprise diversity? • What role do practitioners (activists) and academics play respectively?
And finally… • Twitter: #BristolSCL2016 • Wifi: Eduroam / The Cloud