Friday, March 14, 2014
Diplomat (Omni Shoreham)
In recent years, a scholarly debate has arisen about the role of left-wing parties and workers in contemporary corporate governance reform. While the received wisdom in political science was that the labour movement should resist finance-oriented corporate governance reforms and actively defend stakeholder rights and employee voice in the company (Roe 2003), Cioffi and Höpner (2006) and Gourevitch and Shinn (2005) have argued that, due to their greater focus on middle-class concerns and the massive growth of private retirement savings, left-wing parties and workers have increasingly allied with the mainstream investor community to press for pro-shareholder reforms. This literature has nevertheless largely neglected the role played by trade unions in the politics of governance reform. We argue that organized labour has been an active player in this area of policy-making but that, rather than embracing the doctrine of shareholder value, unions have sought to change shareholders’ view of value creation and to promote an alternative conception of corporate governance, more consistent with the interests of all stakeholders of the firm. This has been particularly the case in those countries where employees have been historically weakly represented in companies’ decision-making bodies. We support our argument with case studies of unions’ involvement in pension fund regulation and corporate governance reform in the United States, the United Kingdom and France.
