Senior British business leaders have warned capitalism must be reformed or could be rejected over greed and corporate tax dodging.
Company leaders described an ‘age of anxiety’ at the state of the economy amid concern around behaviour in big firms.
The financial crisis and a succession of scandals since have eroded trust in big business.
Baroness Shriti Vadera (file image), the former minister who now chairs Santander UK, warned the ‘underlying promise’ of capitalism making all better off was broken
Robert Swannell (file image left), until recently chairman of Marks and Spencer, added capitalism had ‘lost its way’ while Sir Philip Hampton, GSK chairman, (file image right) said poor productivity was another result of the short-termist outlook and short-term pay targets
The critical interventions came from members of the FT City Network — a panel of more than 50 top figures from finance, business and policymaking.
The paper revealed the remarks today after the most recent survey.
Anne Richards, chief executive of fund manager M&G, said: ‘In the current era, best described as ‘the age of anxiety’, we will see capitalism rejected unless it finds a way of fundamentally addressing this anxiety.’
Baroness Shriti Vadera, the former minister who now chairs Santander UK, said: ‘The underlying promise of western capitalist economies — that a rising tide lifts all boats — has been broken.
‘A better model is now needed.’
Robert Swannell, until recently chairman of Marks and Spencer, added capitalism had ‘lost its way’ because companies and their investors had focused too intently on the short term and on the primacy of ‘shareholder value’.
He said: ‘Over the past 50 years the pendulum swung much too far towards [that].’
Anne Richards, chief executive of fund manager M&G, said there was an ‘age of anxiety’ about the economy
Carolyn Fairbairn, the CBI director-general, warned that capitalism had taken a number of ‘wrong turnings’ since the financial crisis
Carolyn Fairbairn, the CBI director-general, warned that capitalism had taken a number of ‘wrong turnings’.
She said: ‘The financial crash, a fixation on shareholder value at the expense of purpose, and the toxic issues of […] payment of tax and executive pay stand in the way of redemption.’
Sir Philip Hampton, GSK chairman, said poor productivity was another result of the short-termist outlook and short-term pay targets.
‘More long-dated and fundamental drivers of success, such as the value of investment in training, new plant and especially R&D, tend not to figure prominently in most companies’ incentive structures,’ he added.
Theresa May ran in the general election on a series of promises about standing up to business and reforming capitalism.
Her promises included suggestions of workers on boards and hints at linking boardroom pay to the worst off in a firm.
The proposals were all dropped after she lost seats at the June 8 polls and threw her majority away.