Towards Social Accountability
Chapter 5: Financialised market accountability and the empowerment of shareholder value
Shareholder interests’ near stranglehold over privatised corporations, even as regulatory processes became more complicated, has reflected the broader financialisation of business processes. The legitimacy of these interests was secured in particular by the ascendancy of the philosophy and policies of ‘shareholder value’ (SV). This discourse overlaps, expresses, yet contradicts more general attempts to govern corporate life through ‘soft’ or ‘self’ regulation. It is the broader paradigm within which the privatisation-regulation sphere operates. The financial sector itself – banks, building societies, investment funds, unit trusts, insurance, and so on – was amongst the first to receive this treatment. Banks, stock dealers and financial intermediaries in both the USA and UK were given more freedoms in their spheres of operations and the scale of their lending and borrowing. The paradigm envisaged that more relaxed, para-statal regulation would be mitigated by state measures which made corporate executives more responsible in terms of adherence to their shareholders’ financial priorities. Taken together this liberalising complex made monetary goals, targets and performance measures the guiding principle for most business activity. Financial profits have always been a leitmotiv of capitalist enterprise. However, the function and role of profits varies. Put simply, from often being what they still are in other business systems – that is, a means to other ends: like expansion, innovation, employment, corporate status – financial measures became ends-in-themselves.
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