THE OWNERSHIP COMMISSION THE OWNERSHIP COMMISSION THE OWNERSHIP COMMISSION THE OWNERSHIP Plurality,COMMISSIO NS tewardship THE andOWNE EngagementRSHIP COMMISSION THE OWNERSHIP COMMISSION THE OWNERSHIP The ReportCOMMISSIO of N THE OWNERSHIP COMMISSION March 2012 THE OWNERSHIP COMMISSION: 2012 Plurality, Stewardship & Engagement The Report of the Ownership Commission March 2012 Published by Mutuo c/o Westminster Bridge Partnership Kinetic Centre Theobald Street Borehamwood WD6 4PJ Tel: 0208 387 1256 Fax: 0208 387 1264 Email: www.mutuo.co.uk ISBN 0-9549161-6-6 March 2012 This publication represents the authors’ interpretations of the subject, not the collective view of the publishers. This publication, or any part of it, may not be reproduced without the permission of the publishers. Kindly sponsored by: 02 THE OWNERSHIP COMMISSION: 2012 About the Commission The Independent Ownership Commission was instigated by Tessa Jowell MP as Cabinet Office minister in January 2010 supported by the Co-operative Group. It quickly broadened its initial brief beyond looking at employee and co-operative forms of ownership that might be applied in the public sector into a more comprehensive analysis of British ownership in the round. It has been a two year undertaking, with eighteen months of evidence gathering and Commission meetings followed by six months of consultations, drafting and writing. During this time we undertook two study trips, one to Boston and Harvard Business School in April 2011 and another to Singapore in July 2011. On each we were able to broaden our knowledge, bolster our arguments and examine the ownership debate in different contexts. We would like to thank each of the Commissioners for giving up their valuable time, for their expertise, depth of knowledge and consistent commentary on the very many early drafts. And of course we thank the Co-operative Group without whose financial support we would have been unable to discharge our business. The Commission has been completely independent throughout its existence. In particular we would like to thank our indefatigable Chair, Will Hutton, who has given his time freely and generously throughout the whole process and has been a constant source of energy, optimism and direction over the past two years. 1 THE OWNERSHIP COMMISSION: 2012 About the Commissioners Will Hutton (Chair) Will Hutton is the Principal of Hertford College, Oxford and chair of the Big Innovation Centre. He is regularly called on to advise senior political and business figures and comment in the national and international media. He is one of the UK’s pre-eminent economics commentators. He began his career in the City as a stockbroker and investment analyst before moving to the BBC, where he worked both on radio, as a producer and reporter, and on TV as economics correspondent for BBC 2’s Newsnight. Prior to joining The Work Foundation, Will spent four years as editor-in-chief of the Observer, for which he continues to write a weekly column. He also regularly contributes to the Guardian and the Financial Times. Before taking up his post at Hertford College, Will was Executive Vice Chair of the Work Foundation. Will’s book The State We’re In was seen at the time as setting the scene for the Blair revolution. Since then he has published The State to Come, The Stakeholding Society and The Writing on the Wall: China and the West in the 21st Century. His most recent book Them and Us charts the course of the financial crisis and examines fairness in Britain. It has been described in The Guardian as ‘a tract for our times - passionate, erudite, with much common sense.’ Glyn Barker Glyn Barker is the Chairman designate of Irwin Mitchell and a director of The Berkeley Group Holdings plc. He was formerly Vice-Chairman of PricewaterhouseCoopers (PwC) UK, where he had strategic responsibility for developing the PwC business across Europe, Middle East, Africa and India - a region of over 90 countries with a $15 billion revenue business. He held a number of senior positions throughout his career at PwC, including Managing Partner from 2006 until 2008, head of the UK’s leading Assurance practice from 2002 until 2006. Prior to this he was founder and global leader of PwC’s Transaction Services practice. Throughout his career Glyn advised a number of the firm’s largest public and private clients. Glyn is also a director of the English National Opera. 2 THE OWNERSHIP COMMISSION: 2012 Sir Roger Carr Sir Roger Carr is chairman of Centrica plc, deputy chairman & senior independent director of the Court of the Bank of England and is president of the Confederation of British Industry. He is also a senior advisor to KKR - the world’s largest private equity company. In addition, he is a visiting fellow of Said Business School, University of Oxford. He has previously held a number of senior appointments including chairman of Cadbury plc, chairman of Chubb plc, chairman of Mitchells & Butlers plc, chairman of Thames Water plc and chief executive of Williams plc. Throughout his career he has served on a number of external committees including the Manufacturing Council of the CBI, The Higgs Committee on Corporate Governance and Business for New Europe. He is a fellow of the Royal Society for the encouragement of the Arts, Manufacturers & Commerce and is a Companion of the Institute of Management. He was knighted for services to Business in the Queen’s New Year’s Honours list 2011. Lady Sylvia Jay CBE Lady Sylvia Jay is Chairman of L’Oréal UK & Ireland. She is also non-Executive Director of Saint-Gobain, of Alcatel-Lucent and of Lazard Limited and formerly of Carrefour. She is Chairman of the Pilgrim Trust and a Trustee of the Prison Reform Trust and the Entente Cordiale Scholarships Scheme. Her civil service career concerned government financial aid to developing countries. She also worked in the French Trésor and was part of an international team which set up the European Bank for Reconstruction and Development. She was awarded a CBE in 2005 and made a Chevalier of the French Legion d’Honneur in 2008 and received an Honorary Doctorate of Laws from Nottingham University in 2009. Peter Marks Peter Marks is Group Chief Executive of the Co-operative Group. He is the leading advocate for greater consolidation in the UK Co-operative Movement and for the ultimate creation of one national co-operative business. Peter has brought about a number of major co-operative mergers over the past decade, most notably that of United Co-operatives and the Co-operative Group in 2007. Following the acquisition of the Somerfield business and the merger with the Britannia Building Society, the Co-operative Group now has an annual turnover of around £13bn, operates almost 5,000 food, financial services, pharmacy, funeral and motor outlets and is the UK’s largest mutual business. The Group is owned by its six million customer-members and employs around 105,000 people Peter is a non-executive director of Thomas Cook Group and a member of the Board of the Greater Manchester Local Enterprise Partnership. In 2011 he received an Honorary Doctorate in Business Administration from Manchester Metropolitan University. 3 THE OWNERSHIP COMMISSION: 2012 Charlie Mayfield Charlie Mayfield became the Partnership’s fifth Chairman in 2007. He joined the Partnership in 2000 as Head of Business Development, responsible for business strategy and development for both John Lewis and Waitrose. Charlie joined the Board as Development Director in 2001 and was responsible for developing the Partnership’s online strategy. He became Managing Director of the John Lewis division in 2005 prior to taking up his appointment as Chairman of the Partnership. Charlie began his career as an officer in the army. He joined SmithKline Beecham in 1992 before moving to McKinsey & Co in 1996 where he worked with consumer and retail organisations. Charlie is the Government appointed Chair of the UK Commission for Employment and Skills. Colin Melvin Colin Melvin founded and leads Hermes EOS, an advisory service for large institutional investors, enabling them to be active engaged owners of the companies in which they invest. He is also non-executive director at Aedas, an architectural partnership, where he chairs the Remuneration Committee and provides guidance on strategy, restructuring and effective governance. Colin has been at the forefront of developments in corporate governance, sustainability and responsible asset management for over fifteen years. He is a member of several industry steering groups and committees including the Supervisory Board of Eumedion and the International Corporate Governance Network’s standing committees on executive remuneration, cross-border voting and shareholder responsibilities. He has co-founded various investor groups and initiatives such as the United Nations Principles for Responsible Investment, for which he was the first Chairman, and the Performance Pay Group and SRI Forum in the UK. He co-drafted guidelines for corporate disclosure on social, environmental and ethical matters, which have been widely adopted by the investment industry. Professor Jonathan Michie Jonathan is Professor of Innovation and Knowledge Exchange at the University of Oxford. He is also Director of the University’s Department for Continuing Education, and President of Kellogg College. From 2004-2008 Jonathan was Director of Birmingham Business School and Professor of Management. He previously held the Sainsbury Chair of Management at the University of London. Prior to that he was at the Judge Business School, University of Cambridge. He worked for Analysys Ltd, and as an Expert to the European Commission before moving into academia. He is the founder Director of the Oxford Centre for Mutual and Employee-owned Business. 4 THE OWNERSHIP COMMISSION: 2012 Paul Mullins Paul Mullins joined DC Advisory Partners in January 2011 as European Chief Executive.