Partnership, Ownership and Control: The Impact of Corporate Governance on Employment Relations

Abstract

Most large UK private-sector organizations are listed companies that are subject to intense pressures to enhance shareholder value. The question arises of whether this constrains the ability of UK managers to pursue genuine partnership arrangements with long-term stakeholders, including employees. Empirical evidence is presented in the form of case studies of partnership relations between labor and management since the mid-1990s in companies operating under different forms of ownership. While some companies have been able to reconcile shareholder demands with a ‘partnership’ approach, in other cases, shareholder pressure has undermined partnership relations of the kind which have endured under more concentrated forms of ownership. Where the corporate governance system can be seen to support partnership, it is in conjunction with market regulation underpinning quality standards, relative stability in product markets, and a willingness on the part of senior management to mediate between the claims of different stakeholder groups.

Keywords: corporate governance, industrial partnership, stakeholding, co-operation

JEL Classification: G34, J53, K22, K23