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Goulding, Simon; Miles, Lilian --- "Regulating the Approach of Companies towards Employees: The New Statutory Duties and Reporting Obligations of Directors within the United Kingdom" [2005] ELECD 199; in Tully, Stephen (ed), "Research Handbook on Corporate Legal Responsibility" (Edward Elgar Publishing, 2005)

Book Title: Research Handbook on Corporate Legal Responsibility

Editor(s): Tully, Stephen

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843768203

Section: Chapter 5

Section Title: Regulating the Approach of Companies towards Employees: The New Statutory Duties and Reporting Obligations of Directors within the United Kingdom

Author(s): Goulding, Simon; Miles, Lilian

Number of pages: 17

Extract:

5 Regulating the approach of companies
towards employees: the new statutory duties
and reporting obligations of directors within
the United Kingdom
Simon Goulding and Lilian Miles




Introduction
The question as to whether in law the directors of companies ought to give
greater consideration to non-shareholder interests continues to receive atten-
tion. Those persons who are employed by a company in the private sector will
be concerned with their terms and conditions of employment, job security and,
if there is one to which they have been contributing, their company pension.
The shareholders of the same company who on a proprietary view, are the
owners of the company, will have rather different priorities, namely dividend
payments and the capital growth in the value of their shares. The directors who
control the company may of course, be some of the most significant employ-
ees themselves but, as they are appointed by the shareholders and can ulti-
mately be removed by them, will focus on the shareholder interests and this in
any event is what the law, which endorses the proprietary view, will require.
It has been argued many times that the vehicle of incorporation must be
employed for the good of society generally and not simply as a means to line
the pockets of shareholders (Dodd, 1932; Wedderburn, 1985a, 1985b, 1993;
Norwitz, 1991). This is often referred to as the `pluralist approach'. On the
other hand, it is argued that restricting company management to the single
objective of profit maximisation is the ...