The Kraft bid for Cadbury revealed how few powers UK regulators have to act to ensure that mergers and takeovers in the UK act operate in the public interest. However, one of the few areas where the Government does have the right to intervene is to protect media plurality.

If News Corporation’s bid for BSkyB were to go ahead, the resulting concentration of media ownership that the new company would represent would lead to a serious reduction in media plurality, which is a cornerstone of a flourishing democracy. It is would also lead to a substantial reduction in competition in the media sector. The implications for consumers of news and content generally and for other broadcasters  - notably the BBC, which the Murdoch empire continually rails against – look bleak. Read more »

   Filed under: Corporate governance, Media | 1 Comment »

The No 10 Briefing on the flexible working and equal pay bill contains a brief reference to ‘looking to promote gender equality on the boards of listed companies’. The TUC has long been an advocate of greater diversity on boards, including, but going beyond the important issue of gender diversity.

At present, company directors are drawn from a very narrow range of backgrounds and we believe that the quality of discussion and decision-making on boards would benefit from a wider range of voices being heard in the boardroom. Read more »

   Filed under: Corporate governance, Equality | Comments Off

There are two interesting corporate governance developments hidden in the detail of the budget report. Mandatory disclosure by institutional investors of how they cast their votes at company AGMs has been a long-standing TUC aim that we have campaigned for over many years. We have edged closer to achieving this today, as the budget report (chapter 3, page 40) says that the Government will consider using its power taken in the Companies Act 2006 to require public disclosure of voting records for institutional investors. Read more »

   Filed under: Budget, Corporate governance, Investment | Comments Off

In a speech on Monday night, Peter Mandelson proposed a radical overhaul of the rules surrounding corporate acquisitions in the UK.  The speech was very precise on the proposals being considered: Read more »

   Filed under: Corporate governance | 3 Comments »

Here’s an interesting juxtaposition today.  Just as Google decides it’s had enough of the Chinese Government’s disregard for the rights of businesses and of its own citizens, Carlyle Group (the private equity firm that  specialises in the arms industry) steps up its role in the country.

   Filed under: Corporate governance, Human rights | 1 Comment »

The Guardian reports today:

City sources believe that the biggest employers will absorb the cost of the tax rather than cut the size of the bonus pools they amass throughout the year. This will mean that while proceeds from the tax could top £2bn – more than four times the £550m estimated by the chancellor in the pre-budget report.

Earlier in the week we also learned that city rents are set to soar because of demand for office space from the finance sector.

Yet at the time of the pre-budget report we were continually told that the Chancellor’s modest tax on bonuses would drive finance away from the UK. Indeed we have been subject to this lecture every time the tiniest tax increase or increase in regulation is proposed. Read more »

   Filed under: Corporate governance, Financial crisis, Pre-Budget Report, Tax | 2 Comments »

Although it probably shouldn’t surprise anyone, it’s nonetheless interesting to see a group of International Monetary Fund (IMF) staff have reported (although this is not a statement of IMF policy, necessarily) that the US banks most active in lobbying against regulation of the financial sector are the ones who took the biggest risks over the mortgage and other deals which caused the crisis. Their paper explores the evidence behind the…

“anecdotal evidence [which] suggests that the political influence of the financial industry contributed to the 2007 mortgage crisis, which, in the fall of 2008, generalized in the worst bout of financial instability since the Great Depression.”

And it finds them guilty. Politicians should take note that anti-regulators really should not be trusted, and the paper concludes with a suggestion that financial sector lobbying should be reined in. It would be interesting to see the same work on the activities of those lobbying against regulation carried out in the UK – perhaps the Government’s better regulation unit could be tasked with the job? Read more »

   Filed under: Corporate governance, Financial crisis, Recession | 2 Comments »

Parliament’s Joint Committee on Human Rights (MPs and Lords) has published a report today (Wednesday 16 December) which looks at how human rights can be improved at the workplace, home and abroad. The Committee criticises the Government for not having a coherent strategy to address the impact on human rights of British business. It is a serious, understated report which makes the case for a long term review of the global human rights impact of British business, but it also makes some immediate points about the domestic scene. It suggests that British industrial relations laws are out of step with our international obligations and, to quote the report, “we doubt the compatibility of the Government’s blacklisting proposals with the UK’s international human rights obligations.” And it says ”we anticipate revisiting this issue.” The TUC welcomed the report.

More broadly, and unambiguously, the Joint Committee notes that

“the right to freedom of association, the associated right to strike, the right to trade union membership and the right to collective bargaining are rights recognised in the international human rights obligations of the UK and overseen by the European Court of Human Rights, the ILO and the UN Committee on Economic, Social and Cultural Rights. The UN Committee on Economic, Social and Cultural Rights and the ILO Committee of Experts consider that current domestic law on the right to strike and the right to collective bargaining places undue restrictions on those rights.”

Read more »

   Filed under: Corporate governance, Employment law, Human rights | 3 Comments »

David Walker’s review of  Corporate Governance in the UK Banking Industry is published today. While some of its proposals are an advance, the review comes across as the financial establishment putting forward the minimum proposals they think will head off root and branch reform so they can get back to business as usual. The City will be sighing with relief and uncorking the vintage champagne today.

This puts the challenge back on to policy makers. This is not the radical road map needed to reform finance. It will not deal with the bonus culture and the risk taking that threatens to destabilise the wider economy. Nor does it make finance serve the interests of a better balanced economy. With further revelations only this week about just how close we came to melt-down in the banking system last year, we are still waiting for the regulatory, tax and governance programme that can really tackle financial excess.

   Filed under: Corporate governance, Financial crisis | 1 Comment »

David Walker’s review of bank governance acknowledges the lack of effective engagement between UK companies and their shareholders and the contribution this made to the financial crisis. But it fails to recognise that weak shareholder engagement and control leaves a gaping hole in the UK’s corporate governance system. Read more »

   Filed under: Corporate governance | 1 Comment »

Despite the dominant trends in politics and economics over the last thirty years a consistent and large majority of the population still believe that the UK should be more equal. In July 2007 the Joseph Rowntree Foundation reported in its survey “Public Attitudes to Economic Inequality” that:

“Over the last 20 years, a large and enduring majority of people (73% in 2004) have considered the gap between high and low incomes too large” …  “People do not necessarily think that those on low incomes are underpaid, but that those on higher incomes are very overpaid”.

We now have new and compelling evidence to bolster this widespread and intuitive view that great inequality is damaging to a society. Read more »

   Filed under: Corporate governance, Economics, Inequality | Comments Off

One of the most sickening features of globalisation is the hyper-exploitation of the poorest countries on the planet by the ghouls of the financial world. What these so-called “vulture funds” do is buy up a poor country’s defaulted debt from a financial institution at an enormous discount, then find a court willing to let them sue the Government of that heavily-indebted, poverty-stricken country for recovery of the whole of the debt. As long as the court awards them more than the discounted rate they bought the debt for, they make a handsome profit – often millions of pounds for virtually no work at all. Read more »

   Filed under: Corporate governance, International development | 2 Comments »