Communitarian governance: the development of management, governance and ownership models

Abstract

The purpose of corporate governance as the protector of shareholder interests is a view that is still widely held. Recently it has been subject to repeated challenge. A new conception of governance that recognises a plurality of interests, particularly those of employees, has received both theoretical attention and practical examination. This paper examines the connection between liberal and communitarian philosophy in the recent debate about corporate governance. Empirical evidence from a critical ethnography is used to show how communitarian ideas can influence the governance model of a medium-sized company, and also how social influences constrain and frustrate the application of these ideals. The result is a formal statement of culture built through a process of consultation, and institutionalised in contractual rights and responsibilities. The company leaders have been drawn towards models of control and ownership found in the employee-owned and co-operative sectors. These are perceived to increase participation and involvement, and give voice to more people in the enterprise. During debate and discussion, however, the management group reduced the powers initially proposed for the governing body, and empirical data suggests this was partly to win support from those sceptical about the proposals, partly to protect decision-making powers, and partly to protect the company from the inexperience of non-executives.