Whose company is it anyway?


This report from the UK think tank IEA looks at the benefits of unprotected capitalism and unruly shareholders.

The UK remains Europe’s best protector of shareholder rights. Its governance and pro-shareholder approach is based on clear principles, unlike other major EU economies where regulation protects local companies and management from shareholder disquiet. The UK’s acceptance of hostile takeovers is a key discipline underpinning an approach to corporate governance which promotes the efficient deployment of capital. The UK should not protect so called ‘national corporate champions’ – to do so would require the government to pick winners by trying to decide which businesses should be protected. Instead, the government should let market forces decide. When governments support failing sectors or companies, they are also harming competitor companies, entrepreneurs and innovators, as well as the taxpayers and consumers who end up covering the additional costs of government protection.

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