The Looming Corporate Calamity by Richard Tudway (London: Heterodox Publications Ltd, 2014). ISBN 978‐0‐99331356‐0‐6. 360 pages. US$52.20 (paperback), US$9.63 (kindle).

Date01 December 2015
Published date01 December 2015
AuthorPaul Collins
DOIhttp://doi.org/10.1002/pad.1719
BOOK REVIEW
The Looming Corporate Calamity by Richard Tudway (London: Heterodox Publications Ltd, 2014). ISBN 978-0-
99331356-0-6. 360 pages. US$52.20 (paperback), US$9.63 (kindle).
Prima facie, a book on corporate governance, would appear odd for review in a journal on Public Administration and
Development (PAD). On closer examination and wider ref‌lection in the context of current international development trends
and issues, this is far from the case.
Globalisation(horribile dictu) has in fact blurred the traditionalboundaries between developedand developing
countries. Many erstwhile developedcountries now face a combination of weak economic growth alongside unprecedented
f‌iscal consolidation in the wake of the global f‌inancial crisis. This is creating new pressures. Migration from collapsed states
in various parts of the world now threatens some of the fundamental characteristics of development, including challenges to
rights and all-inclusiveness and corruption affecting all statesin public and corporate sectors and even Parliaments to say
nothing of the profound diff‌iculties in the governance of world football.
Public Administration and Development has increasingly expanded its scope in ref‌lection of these trends and now includes
transitional economies and the BRICS as well for some time the non-governmental organisation and state enterprise sector. In
the former, one of the many paradoxes is that, in India and China, for example, now reside the largest numbers of the worlds
absolute poor, impressive industrialisation notwithstanding. The public sector has not withered away. In China, state companies
still dominate the economy and feature in the worlds top global players. The quest for increased eff‌iciency and control of waste
and corruption is on. This, also in market economies faced with failures, has brought state regulation back to the fore by way of
independent public bodies. Agency creation in developing countries, driven by New Public Managementdogma, has also
raised issues of accountability and board management (or mismanagement). Pensionscrises in many states of all kinds pose
challenges for public administration and development policy. For some time, Norway has run an independent Sovereign Wealth
Fund to ring fence its oil resources for allold and youngby management of a Parliamentary-appointed board. The
Developmental Stateis this back in vogue.
Finally, the traditional development models have been questioned under the banner of path dependency, in the wake of the
demise of the Washington Consensus. But where do countries now look? It is in this connection that Tudways book is timely.
In the area of corporate governance, even within OECD countries, the models are far from homogeneous. On the one hand, there
is the Anglo-Americanmodel. On the other, there is the Northern European one.
The Looming Corporate Calamity makes a powerful case for a fundamental rethink of what we should expect from corporate
governance. Tudways analysis draws the conclusion that corporate governance arrangements for publicly traded corporations,
notably in Anglo-American jurisdictions, continue to fail us. These failures undermine corporate legitimacy. Failures f‌low in
part from the premise that the shareholders own the limited liability corporation.
Tudway explores in detail the confusions in the interpretation of corporate law in English speaking countries from the
mid-18th century onwards that have created this. These confusions, in turn, have shaped the belief that shareholders should
expect the corporation to be run in their exclusive interesta long standing tenet of corporate governance in Anglo-American
jurisdictions. But as he points out this, it is mostly a charade of convenience. Shareholder interests are not protected any more
than the interests of the other key stakeholders, notably employees. The only real benef‌iciary is the directorate as evidenced by
the huge rewards being paid to corporate executives and falling wages for other employees.
The book helps the reader to better understand the different path-dependent approaches to corporate governance that have
evolved in other jurisdiction. Those in Northern Europe are singled out for particular attention. In these jurisdictions,
shareholders and other key stakeholdersfor example, employees and suppliersare represented on independent supervisory
boards. These boards are constitutionally separate from the corporation and its day-to-day management. Because of this,
Tudway argues that supervision is as effective as it can be in reining-in corporate power and stimulating more genuine economic
and social inclusivity. In Anglo-American jurisdictions where single executive-dominated boards rule the roost, the situation is
very different.
The book offers several sensible proposals for strengthening directorsduties in the independent supervision of corporate
power. In Anglo-American jurisdictions, governance is largely controlled by executive directors despite efforts over the past
public administration and development
Public Admin. Dev. 35, 390391 (2015)
Published online in Wiley Online Library
(wileyonlinelibrary.com) DOI: 10.1002/pad.1719
Copyright © 2015 John Wiley & Sons, Ltd.

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