How the UK Prime Minister’s Corporate Boardroom Reforms Hurt Britain

The speech suggests that her new road map for British economic policy stands to destroy everything that the Iron Lady Margaret Thatcher, who governed from strong conservative policies, fought to create and defend.¬†May’s first suggestion was to mandate inclusion of worker representatives onto corporate boards of directors. A number of European countries have utilized similar co-determination structures in which union representatives sit on corporate boards of directors.¬†Capitalism is a system in which the owners of capital, the shareholders, serve as the ultimate focus of corporate benefit. Maximizing shareholder profit is a crisp, clean way to meter the effectiveness of the corporate enterprise.¬†Installing worker representatives on boards occludes the crystal-clear objective of profit maximization with nebulous “responsibility” objectives that may be impossible to quantify. This invites the potential for crony deals in which executives and labor representatives negotiate side deals that impede disciplining mechanisms for each group, at the shareholders and pensioners’ expense.

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