A government committed to entrepreneurship and stewardship would not allow the public sector to buy goods or services on the basis of price alone. The character of a company must be a key consideration in any outsourcing or partnership choice. Tomorrow’s Company has worked with others ,including the British Standards Institution, to develop The Trust Test, a standard that enables the assessment of corporate character in public procurement. Alongside the Social Value Act, this could be used to prioritise taxpayer value for money. In a recent case, NHS England explicitly ruled out consideration of the character and track record of companies bidding for a major long- term contract. Such behaviour may save pennies today, but condemns the taxpayer to decades of wasted pounds.
understated example, created by a British entrepreneur. Until recently, the founders between them owned nearly 50% of the shares. Other examples include Ayala Corporation in the Philippines (founded in 1834). The family remains an anchor shareholder. Then there is Novo Nordisk – best known for the success of Wegovy, its weight-loss pill. It is a listed company, but Novo Holdings A/S holds approximately 28.1% of its shares and a majority (77.1%) of its voting shares. This has protected its independence. The management wanted to sell the company in the early 2000s, but the foundation board said no. There are UK companies which want to follow the Novo Nordisk example by establishing their ownership trust as a registered UK charity. Now, the Charity Commission has tightened the rules to prevent any payment of charitable trustees “other than for exceptional tasks on a temporary basis”. The unintended, but absurd consequence, has been to prevent a steward-owned business from being able to pay a company’s directors for fulfilling their demanding governance task. The Government, together with the Charity Commission, needs to tackle this.
extract value for today’s shareholders, rather than help companies build strength for tomorrow. In the UK, 84% of places for vulnerable children are now in the hands of providers, funded by private equity, that, according to the Financial Times , are charging the state an average of £384,000 per child per year. Tax incentives need to be aligned with long-term wealth creation, not short- term extraction. The same applies to regulation of utilities such as water companies. The wellbeing of future generations should be the first duty of every regulator.
Listed companies and the importance of an anchor shareholder
Government needs to promote steward ownership throughout each of the seven ages of the enterprise, from birth through adolescence to adulthood and beyond. This means encouragement of employee and community ownership, mutuals, social enterprise and investor stewardship in public companies. Listed companies can be good stewards and think long term. The best usually have an anchor shareholder.
Conclusion
Without an improvement in the performance of the UK economy, few other priorities can be achieved by any government. Above and beyond the usual lobbying from business, the Government needs to hear a vision describing how, over time, a healthy business sector can best grow and contribute to a healthy society. Isn’t that what good growth means? Will family businesses rise to this challenge, and work with others to develop and champion this agenda?
Public procurement, outsourcing and partnerships
Renishaw, a global provider of manufacturing technologies, is an
15 familybusinessuk.org
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