designs. Private ownership Aside from considering the different options for public ownership, the state may turn to experimentation in private (corporate) ownership design in order to improve public contracting: it may choose to carefully select certain types of private partner in accordance with defined ownership criteria, accepting only those criteria which are deemed suitable for an organization providing public services. 17 Doing so, it effectively co-opts the private supplier’s ownership design into the outsourcing model as an additional governance
directors, the pursuit of purpose may or must take priority over profit. Examples of alternative corporate ownership forms in the privatized UK water sector illustrate this difference. For instance, the corporate provider Welsh Water, which is run as a non-profit-distributing company limited by guarantee, has incorporated a sustainability pledge into its corporate purpose to ‘provide high quality and better value drinking water and environmental services, so as to enhance the well-being of [our] customers and the communities [we serve], both now and for generations to
Reversing financialization The state may seek to reverse financialization 1 in the corporate economy by awarding more public contracts to private providers in sustainable ownership. In this way, it may address an important secondary purpose of nurturing a less financialized corporate governance model and more sustainable design of corporate ownership in the wider economy while, at the same time, improving the outsourcing of public services – aspiring to create win-win. Initially at least, providers in sustainable ownership may rely on the largesse of the
Compelling and robust, this book provides an analysis of challenges in public service outsourcing and considers how to avoid failure in the future.
Crucially, it proposes a governance mechanism where outsourcing public services nurtures a less extractive corporate form that is oriented towards a productive purpose beyond maximising shareholder value, with implications well beyond public services. Under these proposals, fostering purpose-driven companies that are independently governed and use profit to pursue purpose can improve both public services and wider economic organisation.
Examining how barriers to implementing this idea within the existing EU and UK legal frameworks may be addressed, the book formulates actionable policy proposals.
Policy design The incorporation of sustainable corporate ownership into public procurement would require careful planning. The state would have to provide contracting authorities with a clear understanding of its expectations under a new policy, noting especially what is, and is not, expected and possible for contracting authorities to do under the current public procurement legal framework. This policy would also have to be reflected in adjustments to various contracting guidance documents, including the national procurement policy statement, 1 to support
Some secondary objectives, however, relate to their business form or corporate ownership structure. The 2021 national procurement policy statement, for example, lists ‘improving supplier diversity’ as both a social value outcome and a national priority outcome that contracting authorities should consider. 33 This implies that the state is concerned not only about how providers supply services in the pursuit of both primary and secondary objectives but also – as a secondary objective in and of itself – about ensuring a degree of diversity in the types of organization
supply side; • the nature of the supply side in the two decades before deregulation; • specific initiatives designed to increase corporate ownership and their impact; • evidence about the way the supply side changed in the 1990s in general; • evidence about rates of return; • the implications of this evidence for the initial years of the new century. Government policy aims All main political parties now accept that the sector provides an important means of housing those who benefit from the flexibility that private renting can provide and those who do not want to tie
sustainable corporate ownership design of their suppliers, with the aim of improving outsourcing while nurturing more sustainable corporate market actors. Corporate organizations in sustainable ownership cover a spectrum of governance options, all of which temper financialization and avoid purely extractive design. These organizations are more diverse than those operating as VCSE organizations in the social economy; they include purpose-driven profit-distributing firms, stakeholder-controlled companies, foundation ownership and mutually owned firms. UK company law leaves
organization that is incorporated – which, in turn, are directly implicated by their corporate ownership structure. We use ‘ownership’ in this context as a shorthand for the legal design of a bundle of rights, set out in the firm’s constitution and in corporate law, that determines the parameters for how the corporation will be governed (further discussed in Chapter Four). Beneficiary rights derive from rules that set the organization’s corporate purpose and define the fiduciary duties of directors, determining whose interests they are meant to prioritize. Related
efficiency conditions in the corporate ownership and control allocation and re-allocation markets. F. Barca's ar ticle, through a survey of the control system in two firm's organizational models (public company and pyramid-shaped group), points out the obstacles - especially the informative one - to the admittance in the corporate control. These obstacles cause a malfunction in the corporate control and property rights market, jeopardizing the efficiency of the whole economic system. Efficiency can be ameliorated by normative interventions con cerning subjects such
