Justice in the boardroom

TORy proposals to inject greater social justice into the way business conducts itself are overdue. The terrible scandals of the past year, including the fight for the restoration of the BHS pension fund and disclosure of appalling working conditions at the Sports Direct warehouse at Shirebrook in Derbyshire, badly damaged the image and reputation of free market capitalism.

So it is encouraging that Theresa May wants to calm the animal spirits. Making companies put workers’ representatives on their boards ought to be a force for good.

We have seen recently, in the battle by US predator PPG to take over the Dulux paint manufacturer Akzo Nobel, how the broader interest of all stakeholders, including workers, can assist management in a tight spot.

Plans to outlaw the way in which companies seek to slough off their responsibility to pensioners must be correct. People who have saved for pensions throughout their working lives do not deserve to be dumped in the Pension Protection Fund where expected retirement income is sharply curved.

May’s efforts to appeal to Labour and undecided voters is understandable. It is also sensible that her government would want to reassure people that the rights of workers, gained from being part of the European Alex Brummer Union, will not be lost. One cannot help but be sympathetic to her proposal that employees be permitted to take up to a year off to take care of a sick or elderly member of the family.

However, it must be said that one of the reasons why people voted for Brexit was because they wanted to be free of some of the red tape put in place by the EU.

The European economies have never fully been able to adjust to the demands of being part of the single currency because of the inflexibility of labour laws. Germany’s bout of strength is partly the result of stripping away restrictive labour market conditions. President Macron wants to do much the same in France.

Social justice in the workforce is an inal ienable right. But in the process of making Britain a kinder and gentler place it would be a mistake to impose stifling rules on entrepreneurship, especially smaller companies that lack resources to pay for such changes.

GSK holds firm

AS A great believer in longterm investment and the life sciences, it is disappointing to see leading investor Neil Woodford selling down his stake in GlaxoSmithKline.

Woodford has made no secret of the fact that he would like to see GSK split into three separate companies – one engaged in R&D and pharmaceutical research, another in vaccines and a third concentrating on consumer health products.

GSK has resisted these demands, arguing it is better with the three legs, with stronger parts of the business supporting the weaker in bad times. The company is on solid ground.

The experience of Britain’s best companies being pulled apart to release shortterm income has not been entirely happy.

Remember the destruction of value at Arnold Weinstock’s GEC and the defenestration of ICI after each company gave in to those demanding a breakup.

It would not be surprising if the consumerproducts background of chief executive Emma Walmsley was a cause for some anxiety among investors when she was appointed last year. The first big transaction likely to come up on her watch is a decision by Novartis to require Glaxo to buy out the 35pc minority interest in their jointly owned consumer healthcare firm.

GSK already has earmarked £8bn in its accounts for this purpose.

The reality is that GSK is not intending to weaken its commitment to science and pharma. In the same space as British competitor AstraZeneca, it is committed to using immunology and genetic research to develop new cancerfighting drugs. It also remains a world leader in vaccines.

GSK’s mistake would be to flirt with a restructuring which allowed unwanted activist investors to gain a foothold.

Oil glut

ONE of the main reasons why households have been feeling the squeeze in 2017 was the surge in oil prices last year.

There was great relief when the wholesale price dropped below $50 a barrel earlier this month. Now an agreement by Saudi Arabia and Russia to try to bring an end to the glut by restricting production for nine months has proved enough to send the price back up to $52.23 in latest trading.

But it may require more than Canutelike declarations from the market bullies to hold back the Trump tide of US production.