Brexit, Bristol and business

Business was never unified on its stance towards Brexit, and very few assessments have studied how it will affect local economies.  Might Bristol be the place to start?

Bristol city centre at night. Luke Andrew Scowen/Flickr. (CC 2.0 by)

Glenn Morgan is Professor of Management at the University of Bristol

In the run-up to the Brexit referendum, there was a common assumption that business was strongly in the Remain camp. This suited the purposes of those determined to paint the issue as one of the elites versus the people. It was never an accurate portrayal of the situation. Instead, businesses tended to line up along the narrow lines of their commercial interests or to remain on the sidelines (as was the case with large retailers such as Tesco and Sainsburys).

The City of London, which has gained from being inside the EU, predominantly backed Remain though some of the more activist hedge funds openly supported Leave. The car industry, predominantly owned from outside the UK but deeply integrated with the EU in terms of markets and supply chains, supported Remain. Other large manufacturers, most obviously Dyson – for whom the EU was only a small part of their overall market and whose supply chain stretched into Asia rather than the EU – were more critical of Remain. They were skeptical of ‘Project Fear’ and the idea that Brexit would cut off EU markets to any significant degree. They also saw advantages in getting out from under what had become portrayed as ‘gold-plated’ EU regulation. Continue reading

What is the point of Business?

Businesses are, in some respects, like cement. They are an integral part of the society we inhabit, and yet for the most part invisible to us as tangible entities. We give them little thought, but our lives would be very different were we to wake up to a world without either.

David Hunter, Charity & Social Enterprise Department (Bates Wells Braithwaite LLP) and Knowledge Exchange Fellow (University of Bristol Law School)

David Hunter, Consultant, Charity & Social Enterprise Department (Bates Wells Braithwaite LLP) and Knowledge Exchange Fellow (University of Bristol Law School)

Ms Nina Boeger, Senior Lecturer in Law and Director of the Centre for Law and Enterprise (University of Bristol Law School).

Nina Boeger, Senior Lecturer in Law and Director of the Centre for Law and Enterprise (University of Bristol Law School).

In April 2016, the UK government did invite us to think about the nature of business though as part of what it called a Mission-led Business Review. It set up an Advisory Panel and ran a public consultation and, seven months on, the Panel has reported back to the government with its recommendations. The timing is interesting, with the review commencing when David Cameron was still Prime Minister, before the UK’s Referendum on EU membership and the US election, but the publication of the Panel’s findings coming when those events have demonstrated a clear sense of public discontent with the status quo.

What was the Review about, what is a ‘mission-led business’ and what are the likely responses to and impact of the Panel’s findings?

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Shaping the corporate landscape: it’s high time for corporate reform

Nina Boeger, Senior Lecturer in Law, University of Bristol

Nina Boeger, Senior Lecturer in Law, University of Bristol

Mistrust in corporate governance and multi-national companies has rarely run deeper than today. In extreme cases of misconduct, corporate bosses might be called in to answer questions about their own exploitative conduct vis-a-vis their businesses, as we have seen recently in the public interrogation of Sir Phillip Green, former “owner” of the now defunct BHS.

But generally, it has become ever clearer that while corporations carry responsibility for many of our current global problems, from rising social inequality to looming ecological disaster, they are rarely held fully accountable for their misdemeanours and recklessness.

Our corporate governance system has so far failed to impose effective limits on the rent-seeking of financial investors and the excess of corporate managers at the expense of the wider workforce and the exploitation of our communities and the environment. Instead, profit maximisation for shareholders, and handsome remuneration packages for company directors even when they manage their company against the long-term interests of employees, consumers and the wider communities that businesses are meant to serve, continue to dominate the order of the day.

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Women in Power: exploring the positive influence of women on boards of directors

Professor Sheila Ellwood, Professor of Financial Reporting at the University of Bristol, outlines her research on the influence of presence and position of women on the boards of directors of NHS Foundation Trusts.

Professor Sheila Ellwood, Professor of Financial Reporting, University of Bristol.

Across the UK and more widely, there are moves to increase the number of women on boards. Some countries have quotas, such as Norway, Spain and Iceland. Some countries require companies to “comply or explain”, as in the UK, Denmark and Sweden. Other measures are less explicit. The rationale is largely to improve female representation and increase board diversity in public and private sector corporate governance.

Along with Javier Garcia-Lacalle, a colleague from the Universidad Zaragoza in Spain, I undertook a study to look at the impact of greater female representation. We examined the influence of women on the boards of directors of NHS Foundation Trusts in England, and the resulting implications.

How does the position of women and high levels of gender diversity on boards of directors affect organisational performance when social performance is paramount?

We found that once a critical mass of women in decision-making positions on boards has been reached, there is little further effect on performance. A high female presence among executive and non-executive directorships does not result in significant differences either in financial goals or service quality. There is no effect on financial performance; positive or detrimental.

Equally, evidence suggests that female presence on boards positively affects corporate social performance[1]. Women are considered more socially oriented than men, resulting in more effective board decision-making, particularly on aspects related to social responsibility.

However, we found that in order for female presence to be effective, women need to be in the most prominent position on boards: Chief Executive or Chair. This is particularly important if boards are to achieve corporate social objectives.

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Are management consultants losing their place as masters of the universe?

Professor Andrew Sturdy, Head of Department of Management and Chair in Management, University of Bristol

Professor Andrew Sturdy, Head of Department of Management and Chair in Management, University of Bristol

Dr Joe O'Mahoney, Reader, Cardiff Business School, Cardiff University

Dr Joe O’Mahoney, Reader, Cardiff Business School, Cardiff University

Management consultants are powerful beasts. They can mould businesses and guide governments, both in high-profile projects and behind the scenes. They do this largely free from any specific regulation and, if revenue is anything to go by, continue to thrive in our uncertain world.

But there are constraints and scrutiny at work too – and they are increasing. A recent studyby researchers at the universities of Bristol and Cardiff in the UK shows how one of the most powerful consultancies, McKinsey & Co., is facing up to new and threatening pressures from clients, governments, NGOs and market forces.

Consulting firms like McKinsey, Booz Allen or Boston Consulting exercise power in three main ways: they have vast resources at their disposal; they are able to intervene in decision-making processes; they can influence what their clients think. In terms of resources, McKinsey not only possesses significant economic capital but its CEO-heavy alumni network provides it with an instant sales route into the Fortune 500 list of major companies. Its knowledge resources are the envy of universities the world over. The McKinsey Global Institute, for instance, is one of the largest management research organisations.

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