The scandals of Northern Rock, Royal Bank of Scotland, British Home Stores, Carillion and many other corporate failings highlight what can go wrong, given the largely undemocratic and unaccountable nature of our economy. Without any serious checks and balances, bad decisions in the boardroom pass unchallenged, often with dire consequences for hundreds of thousands employees and consumers.

Britain is, in effect, an economic dictatorship, with an extraordinary concentration of economic power and wealth. At the level of individual enterprises, a small elite of directors, managers and major shareholders decide everything, to the exclusion of employees, consumers and the wider public.

It is, in part, this lack of economic democracy and accountability that brought Britain to the brink of catastrophe in 2008 and has left the country vulnerable ever since.

The Universal Basic Income: For the Sceptics Read more To help prevent a repeat of the economic disaster of a decade ago, we urgently need greater economic democracy, participation, diversity, transparency, decentralisation and accountability. There are five ways we could move in this direction:

Make corporate negligence and recklessness an explicit criminal offence, to reign in big business sharks and ensure more responsible economic management. Bankers and company bosses should not be able to damage the economy and squander with impunity people’s jobs, pensions and savings. They ought to be held personally liable for damaging corporate decisions, in the same way as other professionals such as doctors and solicitors. The spectre of massive fines and imprisonment would be likely to result in more prudent corporate governance. This would have probably deterred the irresponsible, high-risk decisions taken by the directors of RBS and Northern Rock.

Oblige medium and large-sized companies, and public services like the NHS and local councils, to be accountable to their employees and to the general public by requiring one-third of their management boards to be made up of employee-elected directors and independent directors to represent the interests of consumers. Giving employees direct representation at board level would mean that workforce grievances could be more readily identified and resolved; making for better industrial relations and fewer strikes. Consumer reps could feedback on the public impact of products and services; helping ensure better quality and greater consumer satisfaction. Employee and consumer directors could also act as watchdogs and whistle-blowers against corporate recklessness, which might have prevented the Carillion fiasco. Not being driven by the profit-motive, they are more likely to push for company policies that are ethical and socially inclusive.

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"These five reforms are the embryo of a new democratic, cooperative, accountable and socialised economy that would significantly reduce the chances of a re-run of the 2008 financial crisis"

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Give employee mutual societies control of employee’s pension funds, to decentralise and democratise investment decision-making. Pension funds comprise about one third of total UK stock market investments, which makes them a sizeable counter-weight to the economic clout of big business. If employees have an input into pension fund investment they may direct it in ways that are more mindful of the impact of their investments on their communities and, as a result, choose to invest locally and regionally rather than overseas. They might also be inclined to make investments that focus more on people’s needs and socially valuable production, such as new medical technologies, renewable energy, affordable housing and green public transport.

Require companies to pay their employees a proportion of any increases in profits in the form of new share issues to employee mutual societies. Gradually, this would give employees share-holding power within the businesses they work for. The great strength of this scheme is not only its democratic and social justice elements. It also incentivises and rewards employees for economic success. The more productive and profitable a company, the more shares it would have to issue to the employee mutual society and the sooner employees would gain a significant share-holding and, thereby, leverage over company policy.

Grant employees the legal right to buy out their companies and turn them into workers cooperatives. This could be funded by employee-controlled pension funds. These coops would reduce the strangle-hold of big corporations. They’d diversify and decentralise the economy, localise decision-making and give employees incentives for greater productivity. Evidence shows that people who are employed in worker-owned enterprises tend to have higher output, fewer sickies and strikes, better job satisfaction and greater social solidarity.

These five reforms are the embryo of a new democratic, cooperative, accountable and socialised economy that would significantly reduce the chances of a re-run of the 2008 financial crisis and the subsequent near-failure of the whole economy. They would achieve this goal by a combination of opening up and decentralising economic power, incentivising wiser economic decision-making, improving corporate social responsibility and strengthening the accountability of private and public enterprises to their staff and the wider public. In the process, they’d also improve productivity and industrial relations - and consequently boost the enterprise and the whole economy. It’s a win-win for everyone.

For more information about Peter Tatchell’s human rights and social justice campaigns: www.petertatchell.net