By John Plender for the Financial Times – a review of Firm Commitment: Why the corporation is failing us and how to restore trust in it by Colin Mayer.
It would not be difficult to reach agreement on the proposition that the regulatory response to the financial crisis has been inadequate. Few, on the other hand, would go as far as Colin Mayer, Professor of Management Studies at Oxford’s Saïd Business School, in suggesting that it is wrong-headed from top to bottom and that the Anglo-Saxon capital market model of governance is little short of a catastrophe. Yet in his latest book Mr Mayer puts his finger on so many serious flaws in the way the US and UK systems work that he deserves a hearing.
His starting point concerns the role of the corporation. While accepting that it is a protean organisational form with a huge capacity for good, he worries that while it feeds, houses, educates and transports us, the corporation also exploits, pollutes, poisons and impoverishes. Where previously the actions of companies could be devastating for their customers, suppliers and investors, they now have the ability to destroy economies, communities and species. “It is not an exaggeration,” says Mr Mayer, “to say that through their negligence, incompetence, greed, or fraud, corporations are a threat to our livelihood and the world we live in.”