Introduction

This chapter describes the British system of corporate governance and appraises it from a CST-inspired ethical perspective. It would not be possible, or helpful, to describe British company law and corporate governance in detail. The aim, instead, is to point out the features of British corporate governance that many perceive to be its salient characteristics. The chapter looks at the sources of British corporate governance norms and the principal actors in it. In particular, of course, the focus is on whether it offers, or at least allows space for, employee participation and employee ownership.

The UK's shareholder value ideology is reinforced by (and is probably partly the result of) the dominance of institutional investors as the most important and influential group of investors in UK shares. The ideology has support amongst economists and may also reflect an intuition that the public company has strong structural similarities to the trust. Shareholder value is reflected in a number of important features of corporate governance law and practice and this chapter will describe these. The sophistication of the mechanisms that make it likely that the firm will be well-governed and that ensure that shareholders' expectations are met are, of course, no bad thing in themselves.

From the ethical perspective developed in earlier chapters, it is important to ask whether the British approach helps companies to meet the needs of customers or clients, whether it helps employees and shareholders to achieve the goals that brought them to the corporation and whether it encourages businesses to recognize their responsibility to the broader communities of which they form part.