15 december 2009

Oxford University centre to run Commission on Ownership

Business

Photo of Jonathan Michie
Professor Jonathan Michie is one of ten Ownership Commissioners.

Today sees the launch of a major initiative to make public services more accountable to their users and to strengthen the culture of employee engagement. The Commission on Ownership will be run by the Oxford Centre for Mutual and Employee-owned Business at Kellogg College, Oxford University.

The economic crisis has led to a widespread mistrust of institutions and one of the Commission’s main tasks will be to look at what lessons can be learned and to examine the importance of a diversity of corporate forms to the British economy.

The Commission is supported by the government and will be launched by Cabinet Minister The Rt Hon Tessa Jowell MP in a speech tonight.

Professor Jonathan Michie, founder of the Oxford Centre for Mutual and Employee-owned Business and Director of the Oxford University Department for Continuing Education, is one of ten Ownership Commissioners who have been selected as leaders in their fields from academia, business and policy making. They will produce an authoritative report on the influence of ownership on the governance of the UK in 2011.

The Commission, modelled on the highly influential Commission on Social Justice (1992–1994), will produce recommendations on whether ownership matters; whether it affects fairness in Britain; and whether the government should promote ownership.

The story of Northern Rock demonstrates the importance of ownership.

Professor Jonathan Michie

It will look at citizen and employee involvement in public services, in particular examining the developing new mutual corporate forms, and recommend features of public accountability and staff engagement that could be introduced across the public sector.

The Commission will also examine the ownership profile of the corporate sector and see whether ownership affects behaviour in the sector, and whether it affects customer service, staff engagement, risk taking and entrepreneurialism.

Director of the Centre and Commissioner Professor Michie said: ‘The Oxford Centre was established to provide research into the performance of the mutual and co-owned business sectors. We are excited to be involved with this important initiative, which will focus on the link between ownership, corporate values and performance.

'Dramatic corporate failures during the credit crunch highlighted shortcomings in the traditional business model, with its narrow focus on short term shareholder value, and the Commission is an opportunity to study the potential for other ownership models to enhance our economy and society.'

In September 2009 Professor Michie authored a major report for the Building Societies Association urging the government to return the Northern Rock to the mutual sector. He believes the Commission will want to re-examine this whole period: ‘The story of Northern Rock demonstrates the importance of ownership. Its demutalisation allowed it to engage in speculative, risky profit-making behaviour, which ended with front-page pictures of a bank run not seen for decades.

'If it had stayed mutual it would have been guided more by the customers who owned it rather than by external shareholders, motivated purely by profit.'

The Commission will begin its work in February 2010 and produce a final report within 18 months. It has received £100,000 funding from the Cooperative Financial Services and is seeking additional funding from other sources. 

The University of Oxford will host a series of seminars and events which explore aspects of the initiative during the life of the Commission.