by Mark Goyder
My father died over 11 years ago. It was the centenary of his birth on Sunday.
I am the youngest of his 8 children, and the one of the 8 who became most influenced by my father’s ideas for the future of business.
In 1951 he published a book called “The Future of Private Enterprise” in which he warned his fellow business leaders that the capitalist system had no legitimacy unless it was rooted in morality.
in 1961 he published “The Responsible Company” the first book in the English language to suggest the idea of a social audit. With a group that included the lawyer, Professor Jim Gower, and John Garnett of The Industrial Society (now the Work Foundation
) he worked hard to make the case for changes in company law.
He was way ahead of his time in suggesting reform of company law. In the autobiography (1993) which he published with my mother Rosemary, he says
“Bernard Shaw somewhere remarks that it takes 60 years to bring about a constitutional revolution in Britain. ..As I write (September 1992) we are still some way from legislating for the responsible company…”
Indeed. But only 3 years away from the publication in June 1995 of the final report of the RSA Inquiry on Tomorrow’s company, which pointed out, much influenced by the company lawyer on that Inquiry team, Philip Goldenberg , that directors of UK companies did not understand their duties, and which recommended that the law be clarified to emphasise the fact that they owed their duty not to shareholders (to whom they were accountable) but to the company.
Over the next few years our Chairman Stuart Hampson was a member of the Company Law Review Steering Committee, and Tomorrow’s Company submitted evidence at every stage to support its inclusive approach to business success and to directors duties – the idea that a director could not be doing his or her job well unless they had a clear idea of the health of all their key relationships.
The idea of an inclusive definition of directors’ duties emerged from that process, which was led from the inside of the Department of Trade and Industry by Jonathan Rickford, who originally developed the concept of “enlightened shareholder value” and contrasted it with the “pluralist” view which would make companies simultaneously (and impractically) accountable to all stakeholders.
In November 2006 a new Companies Act was approved enshrining the inclusive definition of directors duties and the concept of enlightened shareholder value.
Success has many parents and failure is an orphan. But as it is George Goyder who was one of my parents, I am proud on the centenary of his birth to point out the significant part he played in focusing minds and hearts on the need to change the way we think about and govern our companies.
As it happens the gap between the publication of his first book and the passing of the Companies Act was not exactly 60 but near enough at 57 years!