Edited by Andrea Westall

Published: Institute for Public Policy Research, London, 1996, ISBN 1 86030 039 1, £5.50

This admirably compact volume of 79 pages contains concise versions of the papers presented by twelve eminent speakers at a conference which I was privileged to attend in February 1996. To summarise it all in the space of 250 words would be an impossible task. The book's editor, Angela Westall, has done this in a five page introduction, and also has included some of the main themes from the discussion session. For this review I will comment on a few points which I personally found in the conference, and now find in the book, to be of especially great interest.

I am always pleased to hear Mark Goyder discuss the "Inclusive Approach" which was, and continues to be, promoted by the Tomorrow's Company inquiry of the RSA. He argues that businesses must be managed to take account of the interests of multiple stakeholders and not only those of shareholders. Having said that I am never quite certain how far he, and the RSA inquiry, would like things to move. There is talk of each business having a, "Success model." On the face of it this seems to imply that a company might bring together a portfolio of measures of performance, not all of which would be financial, and which would respond (for example) to the interests of suppliers, employees, local communities and the natural environment. This also appears to be supported by the Greenbury report, discussed here by Geoff Lindey of J P Morgan, which called for the performance criteria within top management incentive plans to be declared in advance. However, at other times I still seem to hear "The Shareholder" referred to in traditional tones of awe and am led to wonder how far the RSA really wants us to move.

John Kay, in the closing chapter, explores briefly the "Myth of Ownership" and proposes a statement of corporate objectives which defines the duties of a director in terms of the "interests of the company" and the use of his best business judgement. This statement then goes on describe what are the interests of the company in terms of shareholders, investors, employees, suppliers, stability and security of trading relationships, customers, and the company's reputation for high standards of business conduct. This short paper is all the more powerful because it proceeds to discuss the importance of regulating conduct by values, rather than by rules.

I could have selected several other themes. Papers by Jonathan Charkham and David Grayson, among others, are stimulating and even the cautionary remarks from the Institute of Directors about all of this, as expressed by Tim Melville-Ross, are well worth reading.

I would like to think of this slim volume being on the bookshelf of every director and every manager with strategic development responsibilities. I believe that it highlights many key features of the direction in which businesses, and therefore their managers, will need to change over the next two decades. Oh, by the way, before you put it on the shelf, read it!

© Copyright, David J Murray, 1996