How capitalism fails us
BIG corporations have a duty under Britain’s stewardship code to look after the interests of all stakeholders – not just the owners of the business – with respect and fairness when running an enterprise.
Dave Lewis recognised this immediately when he took over an injured Tesco in 2014, and swiftly moved to repair fractured relations with suppliers.
He is soon to move on, but not before addressing a green agenda with a pledge to remove one billion pieces of packaging from UK stores by 2020.
Lewis, who came to Tesco with a Unilever background, recognised firms that seek to be good corporate citizens reap the benefits through the tills. Plainly, it would be humbug (to use one of Boris Johnson’s favourite words) for big companies to adjust their behaviour because we are at the start of a six-week election campaign during which Jeremy Corbyn and John McDonnell are putting capitalism on trial.
They have already done so with their Donald Trump-like personal attacks on billionaires Mike Ashley, Sir Jim Ratcliffe and the Duke of Westminster.
But what this does illustrate is that in an election campaign, especially one which offers two very different models of a market economy, corporations need to keep out of the headlights. it is unfortunate for Ashley, for instance – who has personally rescued thousands of High Street jobs at House of Fraser, Evans Cycles et al – that his £2.1m bill for the use of private jets and helicopters has just been disclosed. This fits right into the ‘fat cat’ narrative, even though in Ashley’s case it is largely his own money he is spending. it is the optics which matter.
Supermarket Asda should be hugely embarrassed for finding itself in the sights of the BBC in this incendiary atmosphere.
it is no secret that the supermarkets operate on very narrow profit margins, and face stiff competition from online rivals and nofrills competitors such as Lidl. But the meanness of their new contracts with employees has to be seen to be believed.
it is increasing the hourly rate of pay by 18p to £9.18p from April 1 next year. in exchange, employees are being asked to give up paid coffee breaks, bank holidays (now counted as part of the holiday allowance) and to work more flexibly, which could mean stacking shelves miles from home rather than working behind a cash desk.
Doubtless this package has been through all manner of statutory consultations and Asda has done absolutely nothing wrong.
But the message is that the grocer looks to be an exploitative employer, even if it is not. This is especially worrying, because at the moment it is still owned by American giant Walmart (though it wants out) which recently enhanced conditions for its own workers in the US using money it saved as a result of the Trump tax cuts.
Asda is not the only current sinner. A Commons report has just made clear the white goods giant Whirlpool (also American owned) has been painfully slow to repair, replace and compensate faulty equipment which can catch fire. When it has done so, it sought to place a veil of secrecy over its dealings by requiring some clients to sign non-disclosure agreements.
On the nation’s motorways, meanwhile, drivers are paying extortionate prices for petrol – up to 29p-a-gallon higher than on other forecourts. Corporations should be held to the highest standards at all times and there are watchdogs in place to make sure this happens. But we also know that regulators such as the government’s Office of Standards and Safety – in the Whirlpool case – and the Financial Reporting Council (FRC) – in terms of auditing and corporate governance – are simply not up to scratch.
A combination of questionable corporate behaviour and weak, under-resourced regulators offers Labour’s Marxist critics of capitalism an open door to make mischief.
Female trailblazers
ALISON Rose, who has just moved into the chief executive’s job at Royal Bank of Scotland, is shamefully just one of six female chief executives in the FTSE 100.
Her presence at the top of one of Britain’s biggest banks came on the same day as Christine Lagarde assumed the most important role in European finance as president of the European Central Bank.
She may not be alone if current speculation is correct, and an elected Boris Johnson-led government appoints Dame Minouche Shafik, director of the London School of Economics, as the next governor of the Bank of England.
Such impressive role models might finally persuade head-hunters and boards to shake themselves out of their lethargy.