Beyond the Plc by Greg Fisher
What is wrong with contemporary capitalism? Was the financial crisis of 2008 caused by deep structural problems in the way firms are organised? In Beyond the plc, two of the most creative thinkers in Britain today, Paul Ormerod and Greg Fisher, tackle this problem head on. They show that Britain lacks diversity in its forms of corporate governance and is too reliant on the plc model. Too many British companies are plcs (or shareholder corporations whose shares are sold on public stock markets). Yet this model was shown to have serious defects during the financial crisis. The authors point out that it was designed for the capital-intensive nineteenth-century economy rather than the contemporary digital economy. They argue that the laws relating to plcs need to be updated and that entrepreneurs should be given options to choose new organisational forms, such as the 'for-benefit corporation', that are better suited to the twenty-first century. Traditional economic understanding hinders reform because it sees the economy as a static machine rather than a dynamic, evolving process. The authors give a comprehensive account of the defects of the plc and show the changes needed to make it work better. They also propose legislation for several new organisational forms: a triple bottom-line company prioritising social and environmental goals as well as profit; a German-style governance structure with employee representatives on the company board; and a for-benefit corporation designed specifically for the needs of the information economy. Greater pluralism in the ecosystem of corporate forms will give Britain the diversity it needs to thrive in the rapidly changing economy of the twenty-first century.