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Date: 2024-03-28 Page is: DBtxt001.php txt00006054 |
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Burgess COMMENTARY |
UK companies call for more business diversity Britain needs a greater diversity of business forms to win back public trust, motivate employees and achieve sustainable growth, says a group of the UK’s best-known companies. They warn public concern is growing about short-term pressures imposed by shareholders in the common type of business, the limited liability company. Criticism is also increasing about entrusting public sector work to businesses driven only by shareholder returns, fuelled by a Whitehall investigation into government contracts held by Serco and G4S after overbilling on electronic tagging for offenders. A report will be launched on Monday following research by 12 companies with varying forms of ownership, structure and governance, including Deloitte, Arup, John Lewis Partnership, Camelot, Adnams and Anglian Water. The project was carried out by Tomorrow’s Company, a think-tank, and chaired by Mark Preston, chief executive of Grosvenor, the Duke of Westminster’s property company. Mr Preston said the aim was not to favour one form over another, but to encourage companies to consider whether they had the right structure to meet their business aims. The report says the UK has a diversity of business types including social enterprises, mutuals, co-ops and employee-owned businesses as well as family firms, partnerships and private equity-owned companies. Interest in alternative forms of ownership has grown since the financial crisis despite the travails of the Co-operative Group and its bank, which raise questions about governance. Co-ops, championed as a different model for capitalism, have outperformed the economy in turnover and grown in number by 28 per cent since 2008. The coalition has put its weight behind promoting employee ownership and creating public sector mutuals but the report calls for it to go further in promoting diversity. It urges companies to keep their business form under regular review and make changes if it does not further their objectives. “Diversity of business form fuels innovation, resilience and growth, and provides greater flexibility to keep up with changing societal and customer expectations,” the report says. This year’s Edelman Trust Barometer found that, while trust in business has started to recover from historical lows, the UK has a lower trust level (7 per cent) in business leaders than China, India, the US, France or Germany and the global average. Customers had more trust in ordinary employees with whom they could relate. At today’s launch, Mr Preston will cite the Southern Cross care home collapse as the best recent example of failure to match form to a purpose. “The vulnerability of its residents and the rather obvious purpose of caring for them ought to demand (not just to suggest) a business form and ownership suited to conservative financing,” he will say. Mr Preston will stress that he is not championing private over public ownership: “Unilever’s far-sighted decision to stop publishing quarterly earnings data is proof that companies in public ownership are not prisoners to short-termism.” He will add: “It is diversity of business form that we seek and compatibility of that form with business purpose.” Supporters of employee ownership cite studies suggesting staff-owned enterprises tend to have higher productivity, greater innovation, better employee engagement and more patient investors than public limited companies. Graeme Nuttall, partner at law firm Field Fisher Waterhouse, said: “The government is removing obstacles preventing the wider adoption of employee ownership. This commitment can be extended to all business forms to encourage greater diversity.” High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/97096a28-5380-11e3-9250-00144feabdc0.html#ixzz2ltatdwMA |
By Brian Groom, Business and Employment Editor
November 24, 2013 11:59 am |
The text being discussed is available at http://www.ft.com/intl/cms/s/0/97096a28-5380-11e3-9250-00144feabdc0.html |
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