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From Lonrho to BHS: The Changing Character of Corporate Governance in Contemporary Capitalism

2018; Taylor & Francis; Volume: 29; Issue: 1 Linguagem: Inglês

10.1080/09615768.2018.1475846

1757-8442

Paddy Ireland,

Housing, Finance, and Neoliberalism

INTRODUCTION: FROM FACET TO NORM Edward Heath was not noted for his memorable turns of phrase.Indeed, one of the few phrases for which he is remembered -'the unpleasant and unacceptable face of capitalism' 1appears to have been unintended, the mistaken product of a mixture of vanity and myopia.In 1973, in a Commons debate on the talks taking place between the TUC and the CBI about inflation, Heath was asked to condemn the practices of Lonrho. 2 Although he was short-sighted, Heath was loathe to wear glasses and he couldn't quite make out the words on the script provided by Number 10: 'This is an unpleasant and unacceptable facet of capitalism'. 3By omitting the 't', he unwittingly coined a phrase which continues to be wheeled out when particularly egregious corporate scandals come to light.It got one of its most recent airings in 2016 in the report of the House of Commons Joint Work and Pensions and Business, Innovations and Skills Committee into BHS.The way in which 'Sir Philip Greene, Dominic Chappell and their respective directors, advisers and hangers-on' had got 'rich or richer' at the expense of 'ordinary employees and pensioners', the report concluded, was 'the unacceptable face of capitalism'. 4 It was used again in August 2017 by the Prime Minister, Theresa May, to describe the practices of companies who had 'deliberately broken rules designed to protect their workers ' and 'award[ed] pay rises to bosses that far outstrip[ped] the company's performance'. 5 It's worth briefly reminding ourselves of the events that prompted Heath's original condemnation.Lonrho had begun life in 1909 as a mining company, before gradually branching out into ranching, agriculture and asbestos.The company only really began to take off, however, when Roland W ('Tiny') Rowland joined the board in 1961.Ruthlessly and skilfully exploiting the opportunities thrown up by de-colonisation, Rowland quickly turned the company into an international conglomerate based in Africa.Schmoozing, bribery and corruption were central parts of his modus operandi.For the most part, the British government were happy to turn a blind eye as they sought to find new and covert forms of control to replace the direct forms of the colonial era.