Pluralism and corporate governance reform
| Date | 26 January 2024 |
| Pages | 1320-1331 |
| DOI | https://doi.org/10.1108/ER-08-2023-0446 |
| Published date | 26 January 2024 |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
| Author | Chris Rees |
Pluralism and corporate
governance reform
Chris Rees
Royal Holloway, University of London, Egham, UK
Abstract
Purpose –The article considers the utility of a pluralist perspective in the context of current debates around
UK corporate governance reform. Oxford School pluralism advanced both a description of how industrial
relations (IR) operated in practice plus a prescription for how it should operate. Whilst economic conditions are
different today, a pluralist framing provides not only a useful way of understanding interests in firm
governance (description) but also a solid grounding for a pragmatic reform agenda (prescription).
Design/methodology/approach –Drawing from key texts in the field, the article considers core concepts
within pluralist discourse and discusses their relevance to contemporary policy debates.
Findings –The article provides a short outline of recent economic and political developments and considers
how a pluralist framing helps explain firm-level interests, challenging the dominant narrative of shareholder
primacy. It then asks what policy interventions might flow from this analysis of capital and labour
investments, and how feasible they are in the current UK context. This allows a discussion of levels of analysis
(evident in materialist theories such as “radical pluralism”and the “disconnected capitalism thesis”). Finally, it
reflects briefly on the links between corporate governance and wider patterns of inequality, suggesting the
pluralist position is consistent with a Durkheimian sociology focusing on the potential in state-led regulatory
interventions to tackle anomie and strengthen social solidarity.
Originality/value –The article brings together literature from what are often treated as relatively discrete
areas of enquiry (employment relations and corporate governance) and also considers the public policy
implications of these connections.
Keywords Pluralism, Corporate governance, Employee voice, Company law
Paper type Research paper
Introduction
In the decades following the Second World War, at the height of the Oxford School’s
influence, global finance seemed tamed by the Bretton Woods settlement, shareholders were
dispersed and relatively disempowered, controls on capital movements were in place and
organised labour was strong. “Managerial capitalism”appeared entrenched, with widespread
agreement that production –not financial claims against the productive process –was
paramount, and that managers would act in the best interests of the company (Buller and
Lawrence, 2022). In this context, Oxford School pluralism offered both a description of how
industrial relations (IR) operated in practice plus a prescription for how it should operate. The
“problems”identified for analysis included unofficial strikes, wage drift and restrictive
practices. Workplace collective bargaining combined with bargained corporatism was the
proffered “solution”to foster trust and maintain social order (Gold, 2017).
From the 1970s, this picture began to change. A combination of legislative, judicial and
managerial action facilitated the rise of hostile takeovers, aggressive company restructuring
and the concentration of share ownership. More loosely-regulated and extractive business
models emerged, characterised by a short-termist and financialised form of governance
(Armour et al., 2003;Ireland, 2018). Here, corporate profits were increasingly directed to
shareholders in the form of dividends and share buybacks, rather than re-invested in the
productive capacity of the firm or in raising real wages (Horn, 2017;Lawrence, 2017). The
UK’s system of mergers and takeovers, or the “market for corporate control”, provided a
further incentive for companies to keep their share price high rather thaninvest in production
and growth, with takeovers often highly leveraged, making short-term profits but leaving
ER
46,6
1320
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/0142-5455.htm
Received 31 August 2023
Revised 19 November 2023
Accepted 21 December 2023
Employee Relations: The
International Journal
Vol. 46 No. 6, 2024
pp. 1320-1331
© Emerald Publishing Limited
0142-5455
DOI 10.1108/ER-08-2023-0446
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