Why can’t companies have ‘social’ as well as ‘limited’ liability?
It does get lonely, this blogging business.
My career has been in the much more collaborative world of marketing and advertising, where I am used to researching opinion, sharing knowledge, knocking around ideas, listening to other people’s thoughts and making innovative judgements based on the team view.
The over-arching theme of all my posts is that the talent and creativity in marketing and advertising could be better used for the benefit of society as a whole, rather than restricted to gorillas selling chocolate and meerkats insurance.
Thus it is frustrating, by definition of the medium, to be forced to progress, all on one’s own, from ‘insight’ to ‘strategy’ to ‘execution’ – and then find one is judged at the executional rather than strategic level (often by people who are even more sad and lonely than you are).
It is a frustration that not all of the most worthy strategic insights I have provided have been taken as seriously as I would like. So, as my last post was an example I am, with apologies, going to return once more to the point I was trying to make.
This was that ‘privatisation’ (aka ‘competition’) and ‘nationalisation’ used to be seen as conflicting ideals.
But the banks have shown that the state can have a stake in the ownership of a company (and an influence of the salaries of the directors) but not be accountable for its day-to-day performance. I used my bank, the Nat West, a subsidiary of the Royal Bank of Scotland, as an example.
As ‘competition’ is the hot topic in the NHS (and, now, rather surprisingly, the police) I proposed that ‘the state’ could invite private companies to tender for public service contracts in return for, say, a 30% stake in the business. Given that we own 84% of RBS, I thought this was rather innocent suggestion. It was also what I would call an ‘executional’ interpretation of a much more ‘strategic’ insight. I really don’t care what the percentages are.
I am more interested in principles. So let’s get back to them.
On the one hand, it is commonly accepted that civil servants are not the best people to provide efficient management and the highest standards of customer service in the public sector – especially health, education, security and transport.
On the other hand, there is a deep-rooted fear of private companies encroaching on this territory and, horror of horrors, making money out of us, the people.
The current debate shows ‘competition’ and ‘public ownership’ as polar opposites. No one is right. No one is wrong. Politicians go round in never-ending circles stuck in the mud of out-dated dogma and the self-justification of views they formed as students over twenty years ago.
Someone has to break through this.
My own contribution is that the banks have shown that private and/or public companies can survive and, hopefully, thrive with ‘the state’ (us) as shareholders.
I am not into corporate finance, and I really don’t care how the corporate structures, memorandi of association, and shareholder controls are defined. I am happy to leave this detail to someone else.
But I do insist that, in today’s free market economy, there has to be a Role of Government whereby the principles of competition and improved customer delivery, particularly in the public services, are defined and refined for the greater good of society as a whole – and that part-owned private companies can be structured to be liable to perform to this greater good.
In this way, it might just be that ‘our’ position as shareholders in, but not managers of, the banks might just – out of distress, debt and default – have shown us a new way forward.
That is my position and I am sticking to it.