Corporate Governance and Resentment

O'Kelly, C. (2019). Corporate Governance and Resentment. Paper presented at European Group of Public
Administration, Belfast, United Kingdom.

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 Corporate Governance and Resentment

Ciarán O’Kelly
School of Law
Queen’s University Belfast
c.okelly@qub.ac.uk

August 27, 2019

This is an early sketch. Please do not quote.

(FROM EGPA PAPER) Introduction

The study of corporate governance begins by convention with how internal re-
lationships, especially (but not only) between managers and investors, relate
to decision-making power. The UK’s Financial Reporting Council, reposi-
tory for the UK Corporate Governance and Stewardship Codes,1 introduces
its discussion to corporate governance and stewardship telling us that “high
quality corporate governance contributes to long-term company performance.
The UK has excellent standards of corporate governance, which makes the
UK equity market attractive to new investment”.2 Reformed in the wake of
the Financial Crisis and other events however, the 2018 edition of the Code
itself is introduced as borne from the ethos that:
1
Financial Reporting Council, The UK Corporate Governance Code (2018) hhttps://
www.frc.org.uk/document-library/corporate-governance/2018/uk-corporate-governance-
codei accessed 17 August 2019; Financial Reporting Council, The UK Stewardship Code
(2012) hhttps://www.frc.org.uk/investors/uk-stewardship-codei accessed 17 August 2019.
2
Financial Reporting Council, “Corporate Governance and Stewardship” (2019) hhttps:
//www.frc.org.uk/directors/corporate-governance-and-stewardshipi accessed 17 August
2019.

1
 Companies do not exist in isolation. Successful and sustainable
businesses underpin our economy and society by providing em-
ployment and creating prosperity. To succeed in the long-term,
directors and the companies they lead need to build and maintain
successful relationships with a wide range of stakeholders. These
relationships will be successful and enduring if they are based on
respect, trust and mutual benefit. Accordingly, a company’s cul-
ture should promote integrity and openness, value diversity and
be responsive to the views of shareholders and wider stakeholder.3

“A successful company,” the Code goes on to say, “is led by an effective and
entrepreneurial board, whose role is to promote the long-term sustainable
success of the company, generating value for shareholders and contributing
to wider society”.4
The German Corporate Governance Code on the other hand “highlights the
obligation of the Management and Supervisory Boards to ensure the con-
tinued existence of the company and its sustainable value creation in line
with the principles of the social market economy (the company’s best in-
terests). These principles not only require compliance with the law, but
also ethically sound and responsible behaviour.” The Code goes on to tell
us that “institutional investors are of particular importance to companies.
They are expected to exercise their ownership rights actively and responsi-
bly, in accordance with transparent principles that also respect the concept
of sustainability”5 and goes on from there to point to shareholders and the
General Meeting as the cornerstone of German corporate governance.
As it is with policy-makers, so it is with textbook authors. Christine Mallin
for instance starts her textbook by pointing to investors’ need to ensure they
invest based on accurate information. Such information is difficult to verify
and that many corporate collapses have taken place without prior indica-
tions in corporate reports that anything was wrong. For Mallin, however, “a
lack of effective corporate governance meant that such collapses could occur;
good corporate governance can help prevent such collapses happening again
3
Financial Reporting Council, The UK Corporate Governance Code (n 1) 1.
4
ibid 4.
5
German Corporate Governance Code (2017) hhttps://www.dcgk.de/en/home.htmli
accessed 16 August 2019, 2.

2
and restore investor confidence”.6 Bob Tricker takes a broader view, point-
ing to corporate governance as a matter of internal power first and then of
relationships with “the shareholders or members, as well as with the external
auditors, regulators, and other legitimate stakeholders”.7 Jill Solomon like-
wise points to governance as a matter of ‘steering’, but setting that steering
in the context of relationships with corporate governance’s meaning “rang-
ing from narrow definitions that focus on companies and their shareholders,
to broader definitions that include the accountability of companies to many
other groups of people, or ‘stakeholders’ ”.8 And so on.
These accounts all share a focus on relationships. Specifically they focus on
those relationships that are deemed crucial to the firm’s good operations.
While the precise relationships vary, including within the same document,
the key point is that corporate governance at heart works outwards from the
firm and its board. They are in short accountability relationships, whereby
managers give give accounts of their decisions to ‘some forum or other’ and
that the members of that forum may ask questions, respond and impose
consequences.9
Both corporate governance policy and corporate governance as a field of study
start in other words from these accountability relationships. In its main-
stream, finance-led manifestation, the corporate governance problem relates
to control of management of giant public firms whose shareholder populations
are vast, diffuse and expensive to coordinate. How is internal power to be
rendered accountable, such approaches ask, such that shareholders can have
appropriate levels of oversight of their investment? Corporate governance
as a solution to this question involves information flowing from accountable
boards outwards to investors. Assuming the system works shareholders act
as a forum, albeit in an uncoordinated way through the market for shares.
They respond to information by exercising their ‘voice’ in corporate strat-
egy, backed up by their market power to ‘exit’ their shareholdings by selling
6
Chris A Mallin, Corporate Governance (vol 6, Oxford University Press 2018) 1.
7
Bob Tricker, Corporate Governance: Principles, Policies, and Practices (Oxford Uni-
versity Press 6 June 2019) 4.
8
Jill Solomon, Corporate Governance and Accountability (3rd Revised edition edition,
John Wiley & Sons 19 February 2010) 1.
9
Mark Bovens, The Quest for Responsibility: Accountability and Citizenship in Com-
plex Organisations (Cambridge University Press 1998) 23-4; also Andrew Keay and Joan
Loughrey, “The Framework for Board Accountability in Corporate Governance” (2015)
35(2) Legal Studies 252.

3
their shares.10 The loop is closed if share values drop, the firm is exposed to
shareholders and directors lose their jobs.11 Alternatively responsive and ac-
countable managers perform well and, motivated by incentive-oriented remu-
neration, they receive their just rewards. Demand for shares rise, benefiting
investors alongside dividends accrued.
In this perspective especially accountability relationships are solidly private.
They are in essence an internal matter arising from the bargains two factors
of production – capital and enterprise – strike in a market for investment.
To the extent that corporate governance policy acts in the public interest it
pursues that interest by promoting a conducive environment for the relation-
ship between capital and enterprise to tbe sustained. More public benefits
are fundamentally little more than a side-effect of good manager-shareholder
relationships. Corporate governance sits firmly in the private sphere. Any
social benefits are not corporate governance’s core purpose, no more than a
well-regulated rabbit population motivates the fox.
Even much of the broader approaches extend only so far in terms of what
counts as, to use Tricker’s words, legitimate stakeholders: namely to suppliers
or labour or other inputs. Corporate governance in such views remains a
question of the firm’s regulation of itself, with scholarship and debate focused
on who ought to have a say over that self-regulation.
In this paper I approach accountability in corporate governance from a dif-
ferent starting point. Instead of asking how relationships might best be man-
aged, accountability in corporate governance ought to be understood in the
context of its ‘giant’ target firms12 and the environment within which they
work. This environment is neither public nor private: it is something else,
not quite between the two, but in an arena of global resource management
that is both commercial and governmental at the same time.
The state, through law, plays a significant role in sustaining such an envi-
ronment. In this context, accountability is as much about who is excluded
10
On exit and voice, see Albert Hirschman, Exit, Voice, and Loyalty: Responses to
Decline in Firms, Organizations, and States (Harvard University Press 1970).
11
Henry G Manne, “Mergers and the Market for Corporate Control” (1965) 73(2) The
Journal of Political Economy 110.
12
On which, more below Colin Crouch, The Strange Non-Death of Neo-Liberalism (Polity
2011); Colin Crouch, “The Global Firm: The Problem of Giant Firms in Democratic
Capitalism” in David Coen, Wyn Grant, and Graham Wilson (eds), The Oxford Handbook
of Business and Government (Oxford University Press 2010).

4
and in what ways as it about who is included. Corporate governance in other
words ought to be understood as a kind of ‘exception’ in law, providing op-
portunities and insulating corporate organisations from the consequences of
their conduct. It ought to be understood in the first instance as a means
for regulating resentment – resentment being a relationship – and only then
as a mechanisms regulating inside the forum. The study of corporate gov-
ernance continues to be, as Moore and Petrin put it “essentially an enquiry
into the causes and consequences of the allocation of decision-making power
within large, socially significant business organisations”.13 But the study of
corporate governance ought to be seen as a study in public administration.
It relates to the design and sustenance of zones and logics of action and in
pursuit of this, in the insulation of corporate organisations from democratic
control.
The paper is structured as follows: after a background discussion,
I discuss the idea of an ‘exception’ and how it might apply in the
context of corporate governance. Then I give an account of giant
firms and their unique properties. I go on from there to discuss
corporate governance regulation as generally conceived, including
recent work on board accountability in corporate governance. I
am especially interested here in Marc Moore’s work on relational
accountability.14 Finally, fourth, I turn to accountability in cor-
porate governance as sustaining the kind of exceptions that allow
giant firms to sustain themselves beyond specific political and so-
cial norms. Accountability, importantly, is composed of rituals of
internal control that also act – actively act – towards its social
opposite.

Spaces of Corporate Governance

In her discussion of export processing, free trade and other special economic
zones, Keller Easterling highlights the way that they sit both geographically
within and legally beyond sovereign territory. They are more than simple
sites for export-oriented production but are set outside the legal norms that
13
Marc T Moore and Martin Petrin, Corporate Governance: Law, Regulation and Theory
(Routledge 2017) 4; emphasis in original.
14
Marc T Moore, “The (Neglected) Value of Board Accountability in Corporate Gover-
nance” (2015) 9(1) Law and Financial Markets Review 10.

5
characterise everyday life. “A country may have strict laws,” she writes,
“regulating labour, the environment, sanitation, health and safety, or human
rights, and it may be a signatory to global compacts. Yet the zone authority
frequently has the power, in individual deals, to grant exception from any
law”.15 These need not be geographically separate spaces. At times indeed
“the national capital and the zone have become the same entity, making the
zone itself the seat of governance from which it is selectively exempt”.16
Sitting “outside the juridical order and general rule”17 such zones do not
represent the emergency suspension of law as posited by Carl Schmitt but, as
Aihwa Ong has it, the selective, purposeful “positive” exception, that “create
opportunities, usually for a minority, who enjoy political accommodations
and conditions not granted to the rest of the population”.18 Ong’s exception
may be a process of inclusion, for her drawing populations into ‘neoliberal’
norms and calculations. More broadly it involves the development of spaces
where otherwise ‘ordinary’ norms do not apply. Regarding special economic
zones even, this may involve less an unbundling of sovereignty from physical
territory as “a flexibility of state practices.” Custom-build geographies are
constructed, creating interlocking spaces, each with their own flexibilities,
maximising economic advantages for insiders whilst maintaining close state
control.19
The rise of the limited liability company has been described in analogous
terms. The corporate form is at its heart founded on separate legal per-
sonhood and the limitation of shareholder’s liabilities for corporate losses.
Companies can sign contracts on their own account, not those of their man-
agers or shareholders. Losses may not ordinarily be recovered from share-
holders.20 These are neither natural nor necessary outworkings of industrial
capitalism. Instead they involved a major intervention, through law, in the
15
Keller Easterling, Extrastatecraft : The Power of Infrastructure Space (Verso Books
2014) 34.
16
ibid 51.
17
Aihwa Ong, Neoliberalism as Exception: Mutations in Citizenship and Sovereignty
(Duke University Press 2006) 5.
18
Ong, Neoliberalism as Exception (n 17) 101; cited in Easterling (n 15) 55.
19
See Ong, Neoliberalism as Exception (n 17) 102-4; also Aihwa Ong, “Powers of
Sovereignty” (2012) 2012(64) Focaal 24 hhttp://berghahnjournals.com/view/journals/
focaal/2012/64/focaal640103.xmli accessed 9 August 2019.
20
For a good account, see Jean-Philippe Robé, “The Legal Structure of the Firm” (2011)
1(1) Accounting, Economics, and Law 1.

6
economy’s workings. They reordered the ownership of risk, created a (for
some) constructive distance between management, capital and labour, and
established financial power within productive processes.21 The 19th Century
developments behind the company’s origins highlight the degree to which
these characteristics were not inevitable.22 Limited liability was not being
contracted for at any scale: it required law to make it real.
The company was in other words itself a legal exception, a zone of sovereignty
over property taking an extraordinary form. Company law originated in re-
gard to quasi-governmental organisations – even of ‘company states’.23 When
it became more freely available as a business form, it became so under con-
ditions such that “although the huge legal privilege of limited liability had
been granted, the exponents of laissez-faire were very unwilling that anything
substantial should be conceded in return for it, in the shape of accountabil-
ity, disclosure provisions or particular governance structures to ensure that
companies acted in the public interest”.24 Instead of a geographical zone, the
company’s separation from the human contributors of capital and enterprise
allowed those contributors to accrue value onto themselves but transfer risks
and costs to others, with suppliers of labour being the most vulnerable to
losses as unsecured creditors.
Over time this ‘exception’ has not only become increasingly available to in-
vestors and entrepreneurs: its privileges landed far more in favour of those
who operated at scale than it did for smaller operators. This in turn has re-
configured links between – as Rahmatian has it – property and sovereignty.25
21
See Paddy Ireland, Ian Grigg-Spall, and Dave Kelly, “The Conceptual Foundations
of Modern Company Law” (1987) 14(1) Journal of Law and Society 149; Paddy Ireland,
“Capitalism Without the Capitalist: The Joint Stock Company Share and the Emergence
of the Modern Doctrine of Separate Corporate Personality” (1996) 17(1) The Journal of
Legal History 41; Paddy Ireland, “Financialization and Corporate Governance” (2009)
60(1) Northern Ireland Legal Quarterly 1.
22
On which see Andrew Gamble and Gavin Kelly, “The Politics of the Company” in
JE Parkinson, Gavin Kelly, and Andrew Gamble (eds), The Political Economy of the
Company (Hart 2000); Paul Johnson, Making the Market: Victorian Origins of Corporate
Capitalism (Cambridge University Press 2010); Timothy L Alborn, Conceiving Companies:
Joint-Stock Politics in Victorian England (Routledge 1998).
23
Philip J Stern, The Company-State: Corporate Sovereignty and the Early Modern
Foundations of the British Empire in India (Oxford University Press 2011).
24
Gamble and Kelly (n 22) 34.
25
Andreas Rahmatian, “Indirect Sovereignty through Property Rights” (2017) 7(2)
Notre Dame Journal of International & Comparative Law 58, 85.

7
The corporate economy is not founded on regulation imposed on already-
existing entities: the subjects of regulation were a product of law itself. A
transfer of power away from the state to both the internal process of giant
corporate entities and to more private arbitration processes, and to ‘private’
commercial law.26 This does not necessarily involve a diminution of state
power, but the construction of new spaces where specific kinds of opportuni-
ties sit and norms apply.
Ong argues for a more expansive sense of the exception, beyond the exception
as Schmitt and others proposed. Schmitt’s exception involved the suspension
of law by – or revealing – an ultimate authority.27 Ong’s “positive exception”
creates a zone of privilege shorn of the day-to-day force of law. Her discussion
of special economic zones in China and other Asian jurisdictions highlights
the way that they “carve up their own territory so they can better engage
and compete in global markets”,28 liberalising in one area, maintaining au-
thoritarian structures in others and also leaving space for limited political
flexibility under a ‘one country, two systems’ rule.29 Patently however, the
exception as she sees it is not simply territorial: it is not simply a matter
of physical space. Or rather, it involves administrative innovations that are
then applied to physical space.
Ong’s sense of the exception is interesting in two ways. First, she highlights
the ways in which varying the parameters of law, in her case over physical
territories, allows for constructive and creative uses of power. State power is
enhanced in some areas but set aside or limited where corporate conduct re-
quires it to be so. It points to such spaces as negotiated but also as explicitly
designed to vary democratic control. In China that control at times aspired
to created a limited level of greater democracy in exceptional territories.30 In
other circumstances, through bilateral treaties, commercial contracts, waiv-
ing of unionisation rights etc, such zones aim to set democratic power aside.31
Second, such exceptions allow states to “respond effectively to the challenges
26
Rahmatian (n 25).
27
Carl Schmitt, Political Theology: Four Chapters on the Concept of Sovereignty (first
published 1922, University of Chicago Press 2005); also Giorgio Agamben, State of Excep-
tion (Kevin Attell tr, University of Chicago Press 2005).
28
Ong, Neoliberalism as Exception (n 17); Ong, “Powers of Sovereignty” (n 19) 19.
29
Ong, Neoliberalism as Exception (n 17) 99.
30
How flexible such a system might be is, at the time of writing, being put to the test
in Hong Kong.
31
Easterling (n 15) 34.

8
of global markets”32 without fully opening their territories up. As such, they
draw global forces into more manageable spaces. It is important to note that
this does not imply unilateral state power over such exceptions: they are
negotiated and tailored for specific requirements, both of corporations and
of states.
Following Ong’s line, we can see the environment within which giant firms
operate as such an exception. We can see it as the active construction,
not only through the making of law and regulation but through law and
regulation’s being put to work, of spaces within which giant firms can pursue
their specific activities. These activities are not commercial alone. They
are pursued in collaborations and geopolitical contexts etc that set them
well outside the ‘merely’ commercial. Their management of contracts and
property both exploits the corporate form in ways derived from their scale
and33 and from their relationships with states.34
They also negotiate law in ‘creative’ ways to the extent that they become
as much authors of law as they are its subjects.35 All this includes their
leveraging different tax costs and regulatory standards worldwide. These
differentials and the arbitrage they promote were made in partnership with
corporations, not ‘found’. In other areas, corporations brought their influence
to bear on trade agreements that tilt competition in consumption markets
in their favour to little if any social benefit.36
The exception metaphor continues to work well here because the zones within
32
Ong, Neoliberalism as Exception (n 17) 98.
33
Janet Dine, The Governance of Corporate Groups (Cambridge University Press 2000).
34
Rahmatian (n 25).
35
Doreen McBarnet and Christopher Whelan, “The Elusive Spirit of the Law: Formal-
ism and the Struggle for Legal Control” (1991) 54(6) The Modern Law Review 848; Mark C
Suchman and Lauren B Edelman, “Legal Rational Myths: The New Institutionalism and
the Law and Society Tradition” (1996) 21(4) Law & Social Inquiry 903; Lauren B Edel-
man and Mark C Suchman, “The Legal Environments of Organizations” (1997) 23 Annual
Review of Sociology 479; Doreen McBarnet, “Questioning the Legitimacy of Compliance:
A Case Study of the Banking Crisis” in Adam Crawford and Anthea Hucklesby (eds), Le-
gitimacy and Compliance in Criminal Justice (Routledge 2012); Lauren B Edelman and
Shauhin A Talesh, “To Comply or Not to Comply - That Isn’t the Question: How Organi-
zations Construct the Meaning of Compliance” in Christine Parker and Vibeke Lehmann
Nielsen (eds), Explaining Compliance: Business Responses to Regulation (Edward Elgar
2011).
36
Dani Rodrik, The Globalization Paradox: Democracy and the Future of the World
Economy (WW Norton 2011).

9
which giant firms work require a suspension of otherwise core market norms.
The manner in which the corporate form is used as a distancing device for
management of corporate liabilities can only take place in the context of
a constructive fiction not only around separate corporate personhood but
around what motivates the construction of corporate group structures.37 In-
dividual sectors see states and corporations working closely together towards
shared ends. Close alignments of geopolitics and commerce around the plan-
ning, routing and protection of global oil flows dictate the systemic impor-
tance of global oil firms for instance, both on a global scale and as ‘national
champions’ aligned with specific states.38
The character of exception may vary between sectors and firms, but cer-
tain characteristics are shared. These include insulation from market forces
negotiated from corporations’ and states’ shared structural positions; deep
collaborative and mutually fruitful networks of state and corporate actors;
‘revolving doors’ for recruitment across corporate, regulatory and political
elites;39 and social and cultural domination.40 These coalesce to generate a
sense of ‘being outside and yet belonging’ for giant firms,41 albeit instead
of a Schmittian sovereign ‘deciding on the exception’, it is a function of the
37
On which see Tom Hadden, “Accountable Governance in Corporate Groups: The
Interrelationship of Law and Accounting” (2012) 22(2) Australian Accounting Review
117; Dine (n 33).
38
James Marriott and Mika Minio-Paluello, The Oil Road: Journeys from the Caspian
Sea to the City of London (Verso 2012).
39
Leonard Seabrooke and Eleni Tsingou, “Power Elites and Everyday Politics in In-
ternational Financial Reform” (2009) 3(4) International Political Sociology 457; Leonard
Seabrooke, “Epistemic Arbitrage: Transnational Professional Knowledge in Action” (2014)
1(1) Journal of Professions and Organization 49; Andrew Baker, “Restraining Regulatory
Capture? Anglo-America, Crisis Politics and Trajectories of Change in Global Finan-
cial Governance” (2010) 86(3) International Affairs 647; Eleni Tsingou, “Club Governance
and the Making of Global Financial Rules” (2015) 22(2) Review of International Political
Economy 225; Kevin Young and Stefano Pagliari, “Capital United? Business Unity in Reg-
ulatory Politics and the Special Place of Finance” (2017) 11(1) Regulation & Governance
3.
40
Anupam Chander and Vivek Krishnamurthy, “The Myth of Platform Neutrality”
(2018) 2(2) Georgetown Law Technology Review 400; K Sabeel Rahman, “Internet Plat-
forms as the New Public” (2018) 2(2) Georgetown Law Technology Review 234; Paul
Langley and Andrew Leyshon, “Platform Capitalism: The Intermediation and Capitaliza-
tion of Digital Economic Circulation” (2017) 3(1) Finance and Society 11; Nick Srnicek,
Platform Capitalism (John Wiley & Sons 22 December 2016).
41
Agamben (n 27) 35.

10
more complex ‘powers of sovereignty’ contained in corporate capitalism.42

Giant firms and their zones of action

The exception metaphor highlights the way that law can create and sustain
zones of action within which specific activities may take place. We ought
to remember however that these activities are not ‘simply’ commercial in
the sense of wholly private profit-oriented activities. They involve deep col-
laborative relationships between state and corporate actors, have significant
social impacts and are sustained in the context of and/or require substantial
infrastructural innovation.
In this section I give a brief overview of giant firms’ characteristics before
moving on to discuss corporate governance itself. Applying the metaphor to
corporate governance is helpful because it points to corporate governance’s
role in sustaining the environment within which giant firms work. Giant firms
are not simply large: they have specific characteristics, albeit varying across
sectors, that have a bearing on not only on their impacts where they operate
– through resource extraction, financialisation, infrastructure management
etc – but through their relationships with law and regulation.
A conventional image of business is that it is defined by market forces. En-
trepreneurs sell products into markets at specific prices that cover their costs
and leave a surplus. ‘First-movers’ derive special benefits because they can
demand advantageous prices for their goods if demand is there. Such advan-
tages don’t last for long. Competitors will likely enter the market if profits
are to be made and so drive prices down. Demand and supply will ulti-
mately reach some kind of equilibrium point where producers are willing to
sell specific numbers of goods at a price point, matched with a population
of consumers willing to pay for the goods at the selling price. If there are
more consumers than available goods they will bid prices up and draw new
producers into the market. If prices drop below a certain point producers
will leave the market and prices approach the equilibrium point again.
This picture, familiar to Smith and Ricardo, does not accurately portray
much of the modern economy however. Our economies are dominated by
giant firms that do not operate in markets like smaller businesses do. In this
42
Ong, “Powers of Sovereignty” (n 19).

11
section I discuss their social presence. This makes for a better starting point
in a discussion of corporate governance, even though corporate governance
itself targets their internal structures. A giant firm has two characteristics,
as defined by Colin Crouch. It is, first, “sufficiently dominant within its own
markets to be able to influence the terms of those markets by its own actions,
using its organisational capacity to develop market dominating strategies”.43
It is also transnational in scale. For Crouch this means that they can ‘regime
shop’ and so can “direct their investments to countries where they find the
most favorable rules.” They also operate transnationally in itself, in a space
“where governmental actors are (compared with the national level within
stable nation states) relatively weak, and corporations therefore have more
autonomy”.44
As such these firms, populating the FTSE 100 most capitalised firms on
the London Stock Exchange, are a specific kind of market-maker. Corporate
governance regulation, in the UK and in similar ways in other jurisdictions,45
explicitly targets such firms. Corporate governance is designed around firms
that belong to distinct kinds of commercial activity.
Internally giant firms are often – although not always – characterised by the
‘separation of ownership and control’ to use the term coined by Berle and
Means.46 This means that their shares are owned by a large and diffuse
population of investors but controlled by a cadre of professional managers
who themselves do not possess substantial ‘ownership’ stakes.47 The ten-
sions produced by the distinct interests of shareholders – to generate returns
on their shares – and managers – to accrue benefits to themselves – is seen
as the core problem that corporate governance ought to solve. Introducing
checks and balances into the manager-shareholder relationship, mediated by
an independent board, aims to solve these internal problems by producing
accountability into the manager-shareholder relationship, something that in
43
Crouch, The Strange Non-Death of Neo-Liberalism (n 12) 49; also remarks in Adolf A
Berle, The Twentieth Century Capitalist Revolution (Macmillan 1955).
44
Crouch, “The Global Firm: The Problem of Giant Firms in Democratic Capitalism”
(n 12) 155-6.
45
See for instance Jean J Du Plessis and others, German Corporate Governance in
International and European Context (3rd edition, Springer Berlin Heidelberg 2017).
46
Adolf A Berle and Gardiner Means, The Modern Corporation and Private Property
(Macmillan 1932).
47
Note, it would be a mistake to say that ownership of shares this is synonymous with
ownership of the business itself. On which for instance see Robé (n 20).

12
turn promises greater corporate performance, more transparency, more man-
agerial effectiveness, more robust shareholder democracy and the like.48
Such promises are however only part of what corporate governance regula-
tion holds out for itself. Multiple corporate governance reports also provide
social grounds for regulating corporate governance: that – by implication –
corporate capitalism’s legitimacy is threatened by corporate failings and –
explicitly – with more robust and transparent internal controls, that legit-
imacy can be restored. I return to this below but for the moment this
aspect to corporate governance narratives does point to the impact of cor-
porate failings among giant firms. They are not simple business collapses, or
even at times simple cases of wrongdoing: they have a twofold impact.

Impact and scale

In the first place, their impact is a function of scale: more people – pen-
sioners, workers, suppliers – are harmed by big corporate collapses and more
people both globally and locally suffer the myriad environmental impacts of
big corporate activities. Comparatively few businesses are market-makers
as described by Crouch but they play a dominant role in 21st Century cap-
italism. The UK had for example 5.7 million businesses registered at the
start of 2017. Of these only 7,500 had 250 or more employees. Despite their
representing only 0.1% of the total population of individual businesses, these
large firms employed 40% of business workers. With a turnover of £1.9tn
they represented 48% of the private economy’s total turnover.49 The subset
of that we might class as ‘giant’ firms sit at the largest end of even this
subset of the business population. They play a dominant role in the econ-
omy. Those few that sit in the FTSE100 represent roughly 80% of the stock
market’s capitalisation.
Firms at the small business end of the spectrum are often ‘quasi-partnerships’
with company law giving sole shareholder-manager or similar small enter-
prises legal form. They are capitalised by banks in the main. Banks routinely
48
On accountability and its promises, see Melvin J Dubnick, “Accountability and the
Promise of Performance: In Search of the Mechanisms” (2005) 28(3) Public Performance
and Management Review 376.
49
BEIS, Business Population Estimates 2017 (2017) hhttps://assets.publishing.service.
gov.uk/government/uploads/system/uploads/attachment_data/file/663235/bpe_2017_
statistical_release.pdfi accessed 6 August 2019.

13
manage risks through loan conditions in the form of personal guarantees that
dilute limited liability, at least where finance capital is concerned.50 Giant
firms operate on the other hand through a multiplicity of corporate vehi-
cles, designed not as ‘wrappers’ for the whole business, but as tools in the
management of business functions and processes. Giant firms are especially
adept at using corporate vehicles to mitigate tax, tort and other liabilities51
and at creating complex ‘vertical’ and ‘horizontal’ integrations through value
and supply chains.52 So, whereas small business access to limited liability is
in fact more restricted than a reading of company law might suggest,53 giant
firms exploit limited liabilities to a far greater degree.

Giant firms, exception and the state

There is a second element to the impact though. Giant firm domination is

not solely a matter of employment or turnover and their social power is not
simply a function of market reach. They often relate to states in unique ways
that go beyond their status as sources of employment, taxation or services.
Firms and states interact in conditions of what Braithwaite calls ‘regulatory
capitalism’, whereby states and firms relate in mutually beneficial ways. To
take one example, such a transactional relationship might involve corporate
50
Judith Freedman, “Limited Liability: Large Company Theory and Small Firms”
(2000) 63(3) The Modern Law Review 317, 329ff.
51
Dine (n 33); Hadden, “Accountable Governance in Corporate Groups” (n 37); Tom
Hadden, “Regulation of Corporate Groups in Australia, The” (1992) 15 University of New
South Wales Law Journal 61.
52
See Jeffrey Neilson, Bill Pritchard, and Henry Wai-Chung Yeung, “Global Value
Chains and Global Production Networks in the Changing International Political Econ-
omy: An Introduction” (2014) 21(1) Review of International Political Economy 1; also
Doreen McBarnet, “Corporate Social Responsibility Beyond Law, Through Law, For Law:
The New Corporate Accountability” in Doreen McBarnet, Aurora Voiculescu, and Tom
Campbell (eds), The New Corporate Accountability: Corporate Social Responsibility and
the Law (Cambridge University Press 2007); David Kinley and Jahan Navidi, “The Long
Arm of Human Rights Risk: Supply Chain Management and Legal Responsibility” (2013)
3(Winter) The Business and Human Rights Review 10 hhttp : / / www . allenovery. com /
SiteCollectionDocuments/Winter%202013%202014%20issue%20of%20The%20Business%
20and%20Human%20Rights%20Review.pdfi accessed 6 August 2019.
53
Absent fraud, limited liability is still an advantage for small business owners when it
comes to debts owed to tax authorities or suppliers.

14
actors being co-opted in compliance or tax collection activities.54 In these
conditions states’ regulatory capacities interact with firms and a plurality of
other sources of governance and “separations of powers within polities have
become more varied, with more private-public hybridity”.55
Such relationships are more than regulatory however. They involve more
than a simple expansion in transactional relationships between firms and
states or even an expansion in sources of governance however. Giant firms
often exist as a function of spaces carved out, including through statehood.
Many inherited their global structures and administrative character directly
from states. Others flourish in the spaces managed by ‘hub and spoke’ law-
making and regulatory networks. Diffuse though they are these networks are
also sources of coercive power for specific states and often facilitate corporate
centralisation.
Globalisation is, in other words, not characterised by fragmentation and in-
creasingly diffuse markets, but by the further dominance of specific states
and giant firms. The global ‘production structures’ – “the sum of all the
arrangements determining what is produced, by whom and for whom, by
what method and on what terms”56 – sit within institution whose logics are
as much administrative and politics as they are market-based. Giant firms
sit at the heart of these structures alongside specific states. These struc-
tures are part of the relationship between such firms and states. Not states
in general, but key nodes in global structures.57 Giant firms are as such
less islands of administrative order in a sea of market chaos than they are
interlinked parts of an ordered and in part consciously structured network.
And while some states dominate, and may even come to ‘weaponise’ their
position in economic and financial networks,58 for the most part they do so
54
See John Braithwaite, Regulatory Capitalism: How It Works, Ideas for Making It
Work Better (Edward Elgar 2008) 24.
55
ibid 27.
56
Susan Strange, The Retreat of the State: The Diffusion of Power in the World Econ-
omy (Cambridge University Press 1996) 24.
57
Especially the United States, as Susan Strange sees it: Susan Strange, States and Mar-
kets (2nd edn, Pinter Publishers 1994) 64; also Thomas C Lawton and Kevin P Michaels,
“The Evolving Global Production Structure: Implications for International Political Econ-
omy” in Thomas C Lawton, James N Rosenau, and Amy Verdun (eds), Strange Power:
Shaping the Parameters of International Relations and International Political Economy
(Edward Elgar 2000).
58
On which see Henry Farrell and Abraham L Newman, “Weaponized Interdependence:

15
in ways that promote champion firms and sustain the spaces within which
those firms function.
Such firms relate to states not so much in conditions of symbiosis than as
the fruit of an emerging logic regarding how a society’s resources might be
administered. Such logics “provide individuals with vocabularies of motives
and with a sense of self. They generate not only that which is valued, but the
rules by which it is calibrated and distributed. Institutions set the limits on
the very nature of rationality and, by implication, of individuality”.59 Giant
firms sit perfectly on the boundaries of market, political and administrative
institutions, something that their managers and beneficiaries have exploited
with great success. It is wrong to situate them in ‘markets’ alone: they are
political, bureaucratic and market actors.
In order to think about this, it is worth considering many giant firms’ origins.
Some are inheritors of global trading and commercial networks developed
under empire. Or they are utilities managing natural monopolies that were
bequeathed to them as public infrastructure was privatised. In the case of
United Kingdom, public utilities came in a number of flavours depending on
how close they were to political control.60 In most cases they were corpo-
ratised – business functions were wrapped in corporate structures and given
significant independence as ‘Morrisonian’ companies – prior to privatisation
with the moment of privatisation involving a relatively ‘simple’ distribution
of shares from the state’s to private hands.
In other cases, for instance in the ex-Soviet Union, agencies were transferred
wholesale, leaving them with enormous power and political influence. Some
are literally ex-state ministries and agencies that were converted into PLCs.
How Global Economic Networks Shape State Coercion” (2019) 44(1) International Security
42; also Henry Farrell and Abraham L Newman, “Making Global Markets: Historical
Institutionalism in International Political Economy” (2010) 17(4) Review of International
Political Economy 609.
59
Roger Friedland and Robert R Alford, “Bringing Society Back in: Symbols, Practices
and Institutional Contradictions” in Walter W Powell and Paul J DiMaggio (eds), The
New Institutionalism in Organizational Analysis (Chicago University Press 1991) 251; also
Douglas, How Institutions Think (Syracuse University Press 1986).
60
See Stephanie M Hoopes, Oil Privatization, Public Choice and International Forces
(Springer 27 July 2016) 82ff; also David Parker, The Official History of Privatisation
Vol. I: The Formative Years 1970-1987 (Routledge 29 January 2009); David Parker, The
Official History of Privatisation, Vol. II: Popular Capitalism, 1987-97 (Routledge 19 June
2013).

16
No wonder that ostensibly private entities continued to avail of mutually
advantageous political relationships.61 It would be wrong to say that they
are subject to close state control so much as that they and states exist in
conditions of mutual control. Firms may express these relationships through
majority state shareholdings and formal or informal representation on corpo-
rate boards. This has at times caused controversy as firms sought to attract
capital and reputational advantages through flotations in London or New
York.62 See for instance the ENRC’s IPO. ENRC, a Khazakh extraction
firm with close links to the state and oligarchical control floated on the Lon-
don Stock Exchange in 2007 and was delisted in 2013, all the while amidst
controversy over its structures, political ties and the risks to (and opportu-
nities for) investors inherent in those ties.63
Other utilities have used their natural monopoly advantage to build the capi-
tal, expertise, and political relationships required to become global leaders in
their specific fields. Their competitive advantage comes not only from scale
or ‘value propositions’ (if it does at all). It comes from the political and ad-
ministrative networks they cultivate: their business is privatisation itself.64
Their ‘markets’ are not populated by large numbers of consumers discover-
ing equilibrium prices but by small and tightly-knit networks of technocratic
managers and their political clients. Relationships are key.
Other firms, ostensibly less entwined with states, seemingly act as they do in
private markets for financial services or as providers of online infrastructures
or in retail. Even then they rely on active relationships with law and regula-
tion that are characteristic of giant firms. Very often they generate returns
from an ‘active absence’ of law. They actively cultivate and lobby for law-
making complexity or ‘deregulation’ that clears the way for their operations.
61
Although for some those relationships were far from congenial. On Yukos’s ‘renation-
alisation’ see Curtis J Milhaupt and Katharina Pistor, Law & Capitalism: What Corporate
Crises Reveal about Legal Systems and Economic Development around the World (Univer-
sity Of Chicago Press 2008) 149ff.
62
On reputational capital and IPOs, see Gül Berna Özcan, “Politically Connected Firms,
Elite Ties and Internationalisation: The Case of ENRC” (London, 2018) hhttps://papers.
ssrn.com/sol3/papers.cfm?abstract_id=3184031i accessed 6 August 2019.
63
See Ciarán O’Kelly and Sally Wheeler, “Internalities and the Foundations of Corporate
Governance” (2012) 21(4) Social & Legal Studies 469; Özcan (n 62); Isabel Gorst, “ENRC
and Kazakh Corporate Governance” Financial Times (London, 10 June 2011).
64
Wendy Larner and Nina Laurie, “Travelling Technocrats, Embodied Knowledges:
Globalising Privatisation in Telecoms and Water” (2010) 41(2) Geoforum 218.

17
They advocate for regulatory barriers to market entry as part of their actively
managing the markets into which they sell their products. Alternatively they
carve a space for their activities in part by supplying new opportunities for
states to exercise their own powers, perhaps through innovations in surveil-
lance65 and intelligence or by providing services with ‘commercially sensitive’
contracting that allow states to evade their own rights obligations.66
Financial services firms have or instance consolidated into global behemoths
in the wake of deregulation. For some giant financial services firms add value
for wholesale and retail consumers by matching holders of capital with those
seeking investment. For others they extract value by placing themselves
between capital owners and those in need of capital, extracting a fee for each
transaction from each side. They can only do so in the context of congenial
competition, antitrust and consumer law. When market for forces do bite,
as happened for instance in the global financial crisis, they exploit political
clout and their sheer size to ensure that they are deemed ‘too big to fail’, are
insulated from market forces and see their losses nationalised.
New technology companies have also created new markets for search or by
developing new spaces for people’s social interactions. Or, as in the case
of Apple, they have designed material artefacts that, acting as interfaces for
people’s online lives, have played a significant role in generating demand both
for online services, for new styles of communication and, in a lucrative loop of
demand, for new artefacts aimed at enabling the consumption to take place.
American anti-trust regulations especially, directed as they are at prices and
efficiencies for consumers, have facilitated growth and consolidation of giant
firms with almost complete dominance over social networks and communica-
tion online. And while such firms have received a less friendly reception in
Europe, they benefit from friendly tax regimes and first-mover advantages.
Rather than seeing those first-mover advantages fade as competitors move
in, ‘platform’ monopolies exploit network effects to lock their consumers in
and either buy competitors out or otherwise deny them space to grow. And
they impose financial costs, not on their consumers but on their suppliers,
whether through driving down prices or by requiring lock-in.67
65
Shoshana Zuboff, The Age of Surveillance Capitalism: The Fight for a Human Future
at the New Frontier of Power (Profile Books 2019).
66
Fiona De Londras, “Privatizing Sovereign Performance: Regulating in the ‘Gap’ be-
tween Security and Rights?” (2011) 38(1) Journal of Law and Society 118.
67
See Srnicek (n 40); Langley and Leyshon (n 40).

18
Giant firms in general benefit from and are characterized by a close and
intricate relationship with the state. Sometimes they access highly lucra-
tive contracts, to be awarded not in open markets, but under conditions of
very limited competition.68 Elsewhere, requirements for stability and the
very fact that suppliers are often staffed by ex-public officials means that
competition is limited or removed entirely by long-term contracting and a
pro-incumbent bias when it comes to renewal.69 Sometimes their relationship
involves a shaping of regulation and non-regulation to their own advantage,
although they may come to occupy the spaces created by regulation and
non-regulation, rather than simply carving them out through captured law-
making. The relationship between corporations and the state is, in short,
reciprocal, not conflictual:70 it is intimate.
While giant firms may not quite have the status of ‘company-states’ of previ-
ous globalisations,71 they are governmental in their profound social impact.
Natural monopolies continue to extract monopoly rents from consumers. Fi-
nancial services firms have been successful first in passing the costs of the
financial crisis onto taxpayers and then in hoovering up the fiscal injection
that followed, bringing further benefits to themselves and arguably delaying
the recovery in the European and American economies, and prolonging the
crisis’s impact on those countries’ citizens. And we are only beginning to un-
derstand the social and political impact that platform monopolies are having
on Western societies.
All of these involve an administrative ordering of societies far beyond the
day-to-day administration of commerce. James Scott’s ‘high modernism’
in administrative statehood72 might not describe the far more limited and
less ambitious remits of individual giant firms. Privatised utilities can have
profound social effects, including in terms of how people think about say,
water as a scarce resource. Financial services firms have successfully recast
popular attitudes to debt in the English-speaking north-Atlantic economies,
in doing so – and in partnership with regulatory authorities – sustaining
68
For instance Karen Weise, “Amazon and Microsoft Are 2 Finalists for $10 Billion
Pentagon Contract” The New York Times (10 April 2019) hhttps://www.nytimes.com/
2019/04/10/technology/amazon-microsoft-jedi-pentagon.htmli accessed 6 August 2019.
69
Colin Crouch, Making Capitalism Fit for Society (Polity 2013) 9.
70
Braithwaite (n 54) Especially ch. 1.
71
Stern (n 23).
72
James C Scott, Seeing Like a State: How Certain Schemes to Improve the Human
Condition Have Failed (Yale University Press 1998) 88.

19
growth for a time despite wage suppression for many. Technology firms have
reordered people’s conceptions of privacy. They lack the holistic ambitions of
high modern states but nonetheless, in bespoke and localised ways are driven
by a belief in and optimism about their particular styles of technological
knowledge, rational design and social control.73
They exploit very conventional metrics at times, but in expanded ways. Con-
sumption of water requires large-scale and often state-led expansions in me-
tering and billing and the utilisation of accounting concepts in order to create
a space for corporate action74 And new wholesale and trading markets were
constructed, whether in mediating between water supply and, say, energy
generation75 or in wholesale electricity trading.76 This did not involve com-
plete extension of productive energy into hitherto untouched areas of social
life. After all utilities had been around since the start of the 20th Century.
What did happen is that production processes were reconfigured over time
and to various extents as corporate processes. They became available to cor-
porate management metrics, legible to corporate accounting methodologies,
open to innovations in financial trading practices and the like. This in turn
facilitated corporate managers and political actors to put ‘market’ and other
discourses to work in explaining and justifying the carving of such spaces out
for specific firms.
73
Scott (n 72) 89-90.
74
See for instance Stephen Jollands and Martin Quinn, “Politicising the Sustaining of
Water Supply in Ireland – the Role of Accounting Concepts” (2017) 30(1) Accounting,
Auditing & Accountability Journal 164.
75
Brendan P Walsh, Sean N Murray, and DTJ O’Sullivan, “The Water Energy Nexus,
an ISO50001 Water Case Study and the Need for a Water Value System” (2015) 10 Water
Resources and Industry 15.
76
Michael Grubb and David M Newbery, “UK Electricity Market Reform and the En-
ergy Transition- Emerging Lessons” (2018) 39 The Energy Journal 1; Alexia Brunet and
Meredith Shafe, “Beyond Enron: Regulation in Energy Derivatives Trading Symposium
on International Energy Law” (2007) 27(3) Northwestern Journal of International Law &
Business 665; S Hesmondhalgh, “Is NETA the Blueprint for Wholesale Electricity Trading
Arrangements of the Future?” (2003) 18(2) IEEE Transactions on Power Systems 548;
David Newbery, “Tales of Two Islands – Lessons for EU Energy Policy from Electricity
Market Reforms in Britain and Ireland” (2017) 105 Energy Policy 597.

20
Carillion

On January 15th 2018 Carillion, a British construction conglomerate, en-

tered compulsory liquidation. Carillion, which specialised in large-scale state-
funded construction and logistics projects was one of a group of giant firms
specialising in state infrastructure contracts. Like post-privatisation and
post-imperial firms, Carillion was one of a number of giant firms characterised
by its acting and interacting as a de facto element in state operations. With
its core business was founded on relationships with a state that was itself
ideologically committed to contracting its activities and services out, it was
a member of a class of giant firms that might be classed as purely neoliberal.
Or as one Carillion report put it, the company had as a core strength and
so relied on “deep, long term customer relationships, working as a trusted
partner with high levels of repeat business”.77
Carillion’s collapse no doubt followed a whole series of bad business judge-
ments. The firm was, as a House of Commons report notes, hiding static
revenue behind massive borrowing and financial accounting that was ‘aggres-
sive’ to say the least78 and its financial reporting was noteworthy by myriad
‘sins of omission’.79 But there was something else lurking behind this story
of bad judgement. Before the firm’s collapse it and its directors were held
up as exemplars of good corporate governance. The board and its directors
‘ticked all the good governance boxes’.80 It was lauded for its management
of corporate governance risks.81 As the firm over-extended itself, underpric-
77
Carillion plc, “Group Business Plan” (London, January 2018) hhttps : / / www .
parliament.uk/documents/commons- committees/work- and- pensions/Carillion- Group-
Business-Plan-January-2018.pdfi accessed 5 March 2018, 6.
78
Federico Mor and others, The Collapse of Carillion (Commons Briefing paper, CBP-
8206, 2018) hhttps://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-
8206i accessed 19 September 2018, 13ff.
79
Matthew Vincent, “Carillion’s Sins of Omission on Pay and Debt Were a Warning
Sign” Financial Times (16 January 2018) hhttps://www.ft.com/content/2c6ad932-fad8-
11e7-a492-2c9be7f3120ai accessed 13 March 2019.
80
Kate Burgess, “Carillion’s Board: Misguided or Incompetent?” Financial Times
(17 January 2018) hhttps://www.ft.com/content/2095beca-fb8b-11e7-a492-2c9be7f3120ai
accessed 13 March 2019.
81
British Standards Institution, Enabling Risk Management: BS 13500 Code of Practice
for Delivering Effective Governance of Organizations (BSI Case Study, 2013) hhttps://
www.bsigroup.com/Documents/standards/case- studies/BSI- managing- risk- BS- 13500-
governance-of-organizations-UK-EN.pdfi accessed 7 August 2018.

21
ing its contracts and building up debt without increasing asset values, its
occupational pension funds fell into a substantial deficit of £990 million,
representing a 115% ratio of deficit to corporate capital.82 Most strikingly
however, during this time the board changed its bonus structures to prevent
clawbacks in the event of corporate failure.83 And dividend payments con-
tinued even as the company’s cash ran short, meaning that the company was
in fact borrowing money to pay dividends.84 The board protected itself and
did not attend to the clear signs of problems on the horizon (and closer than
that). But there are other issues at play in Carillion’s collapse too, not least
the diligence attention payed to dividend payments even as it drained the
firm’s pension fund.
Carillion was a quintessential member of the giant firms focused on infras-
tructural work contracted out by government. Its commercial operations
were founded on relationship-building and collaboration combined with (ap-
parent) expertise in large-scale construction. It would be a mistake to lay the
blame for the scandal on privatisation as such, given that states have always
retained construction firms to build. The problem was, as Richard Mulgan
has said about contracting out, with “difficulties over holding contractors to
account, such as how to monitor performance and how to manage the clash
between public service values and private profit”.85
Carillion’s conduct, as is the case with much of the giant firm conduct de-
scribed above, was driven in large part by financialisation. That is, Car-
illion’s core purpose, at least as can be divined from its board’s conduct,
was to generate financial returns for capital. By borrowing to pay dividend
the board sought to serve financial institutions, in part generating returns
for institutional capitalism by neglecting to sustain its pension fund, if not
diverting resources from worker-capitalists to financial capitalists, at least
favouring one kind of value-creation over another. The ‘necessary social evil’
82
Mor and others (n 78) 19.
83
Rachel Millard, “Carillion Secretly Protected Bosses’ £4m Bonuses before Crisis” This
is Money (12 September 2017) hhttp://www.thisismoney.co.uk/~/article-4873710/index.
htmli accessed 20 September 2018.
84
Ben Chapman, “Carillion Bosses ’contemptuous’ about Paying into Pension Schemes
While Handing out Bumper Dividends, MPS Say” The Independent (19 February 2018);
Mor and others (n 78) 16.
85
Richard Mulgan, “The Extended Scope of Accountability in Public Administration” in
William R Thompson (ed), Oxford Research Encyclopedia of Politics (Oxford University
Press 2019).

22
as Marc Moore has it,86 of generating private value as a means of storing
resources for future pension payments is by this account only salient when
that value is paid as surplus, not as cost.
The exception metaphor works in general when we think of firms like this op-
erating in spaces that are constructed and administered in collaboration with
them and on their behalf. The “political accommodations and conditions”87
under which such firms work support collaboration on surveillance, insula-
tion from tort and tax liabilities, or in this case large-scale relationship-driven
contracting systems. What role then for corporate governance and especially
what role for accountability in corporate governance?

Corporate governance and exception

Carillion’s failures were no doubt related to corporate governance in the con-
ventional sense. As such an interpretation is available that simply examines
board business judgement and the dysfunctions inherent in their shareholder
value pursuits. Accountability also performs a function within corporate gov-
ernance that helps situate ‘giant firms’ in a zone that allows them to perform
publicly relevant functions insulated from consequences of their operations.
They do this by distinguishing between those whose vulnerabilities demand
an account and those whose vulnerabilities, while unfortunate perhaps, do
not demand an account. Corporate actors and holders of capital are in fact
insulated from the possibility of democratic control. Corporate governance is
as such not primarily a regulatory intervention aimed at control. It is a form
of administration that both sustains and is formative of specific kinds of eco-
nomic organisations and functions. Corporate governance is not about
control through regulation. It’s about sustainability through insu-
lation. Such firms as Carillion served to drive down prices for infrastructure
spending. Through public-private finance projects they removed spending off
government accounts. Their scale and scope allowed them to act aggressively
against union memberships.88
86
Marc T Moore, “Redressing Risk Oversight Failure in UK and US Listed Compa-
nies: Lessons from the RBS and Citigroup Litigation” (2017) 18(4) European Business
Organization Law Review 733.
87
Ong, Neoliberalism as Exception (n 17) 101.
88
House of Commons Scottish Affairs Committee, Blacklisting in Employment: Final
Report (oral and written evidence, HC 272, 2015) hhttps://publications.parliament.uk/

23
Recent scrutiny on board accountability in corporate governance has drilled
down on the plurality of accountability mechanisms as a legitimating sub-
strate underpinning managerial power. Underpinning that in turn, the focus
has been on the relational character of accountability, on its being driven,
not by procedure as such, but by the development and maintenance of dia-
logue between senior actors and the company’s members: accountability is
a matter in this context of ‘normatively cognisable explanations’ by decision
makers to ‘decision beneficiaries’.89
For Joan Loughrey and Andrew Keay, accountability mechanisms ought to be
understood as operationalised within a four-stage process. Echoing Bovens’s
work,90 the distinguish between boards reporting; explaining and justifying;
being scrutised and subject to interrogation; and having consequences im-
posed.91
Key to Loughrey and Keay’s work here is the idea of governance mechanisms
(themselves ‘normatively cognisable’) describing and giving form to key or-
ganisational relationships. We should also note that, while this conceptual
framework does not preclude the relationships being akin to agency relation-
ships, it allows for the possibility of many other kinds of accountability. The
forum especially can be more or less formal and can ‘drift’ in its articulating
its instructions and interests.92
Keay and Loughrey argue ultimately that we need to be vigilant for ac-
countability’s plural character, and to adjust the kinds of mechanisms and
imperatives underpinning each of accountability key stages (reporting; ex-
plaining; interrogating; delivering consequences). The plural accountability
framework they propose
pa/cm201415/cmselect/cmscotaf/272/272.pdfi accessed 17 August 2019.
89
Moore, “The (Neglected) Value of Board Accountability in Corporate Governance”
(n 14) 14.
90
For instance Box 1 in Mark Bovens, “Analysing and Assessing Accountability: A
Conceptual Framework” (2007) 13(4) European Law Journal 447, 452.
91
Keay and Loughrey (n 9) 275; also Andrew Keay, Board Accountability in Corporate
Governance (Routledge 2015) 995-6; Joan Loughrey, “Breaching the Accountability Fire-
wall: Market Norms and the Reasonable Director” (2014) 37(3) Seattle University Law
Review 989.
92
Thomas Schillemans and Madalina Busuioc, “Predicting Public Sector Accountabil-
ity: From Agency Drift to Forum Drift” (2014) 25(1) Journal of Public Administration
Research and Theory 191.

24
 . . . should assist in identifying the different accountability mecha-
nisms to which directors may be subject, and thus assist in avoid-
ing the pitfalls of multiple accountability, as well as accountabil-
ity gaps. Accountability mechanisms can have different functions
and these may not be mutually complementary. It can have detri-
mental as well as beneficial consequences and there may need to
be a trade-off between these mechanisms. Because of this, we
need to view directors’ accountability in a holistic manner, and
not focus only on the effectiveness of one particular mechanism.93

This perspective makes an important contribution to the relational perspec-

tive outlined in the introduction above. That said, while Keay and Loughrey
imagine accountability as a quality that can be delivered through putting
appropriate mechanisms in place, accountability may be more than about
relational engagement. It may be about disengagement too. It may be more,
that is, than something that can be subject to metrics and achieved. It may
be that accountability is a quality of governance because it is a quality of
inclusion and exclusion. Specifically it may be a matter of distinguishing be-
tween morally interesting and morally uninteresting vulnerabilities to harm.
Marc Moore’s approach comes closer to this perspective. Moore, who is
interested in company law’s public character, takes issue with the idea of
accountability discussed above, where there is a necessary and tidy trade-off
between effective authority and accountability.94 Moore writes that

. . . authority and accountability are not mutually offsetting or-

ganisational governance qualities. On the contrary . . . they are
inherently interdependent phenomena, in the sense that, within
complex but freely constituted private organizations – including
business corporations – decisional authority is structurally unsus-
tainable if not accompanied by effective mechanisms for ensuring
93
Keay and Loughrey (n 9) 279.
94
see Hampel Committee, The Hampel Report (1998); also Bainbridge’s work on di-
rector primacy in corporate governance in Stephen M Bainbridge, The New Corporate
Governance in Theory and Practice (Oxford University Press 2008); Stephen M Bain-
bridge, “Director Primacy and Shareholder Disempowerment” (2006) 119(6) Harvard Law
Review 1735; Stephen M Bainbridge, “Director Primacy in Corporate Takeovers: Prelim-
inary Reflections” (2002) 55(3) Stanford Law Review 791.

25
 the accountability of authority-holders to the recognised benefi-
ciaries of their discretionary decisions.95

Moore’s line, which he uses as the basis of his argument for the regulative role
of the state in sustaining corporate executive’s legitimate holding of power
over shareholders, is that organizational power cannot be legitimate unless it
is accountable power: unless it is oriented towards some principal, and unless
that principal is entitled to an account of how that power is being used, and
unless they can act in situations where they judge executive action to be
counter to their interests.
This approach is interesting because it emphases reciprocal recognition be-
tween ‘accountee’ and forum and especially accountability’s role in reassur-
ing all parties regarding their positions, powers and the parameters of their
roles. Nonetheless, there is some potential for further understanding of ac-
countability in corporate governance when we start to think of accountability
relationships in this way.
Corporate governance’s role in exception is focused on recognition and its
opposite. For the bulk of the corporate governance era it has been focused
on the capital-enterprise accountability relationship as core. The separation
of ownership and control, so the story goes, leaves investors vulnerable to
managerial misfeasance and so law articulates a standard that redresses the
imbalance by promoting accountable conduct. Much scholarship was devoted
to pushing back against this line, arguing for greater ‘stakeholder’ roles in
corporate governance, or at least pointing to the weak justifications under-
pinning the shareholder primacy position.96
The shareholder primacy position was not solely a matter of internal power
however. It was a matter of broader social power. The kinds of firms towards
which corporate governance regulation aims, especially as they financialised,
were growing in their social impact. Corporate governance regulation sought
95
Moore, “The (Neglected) Value of Board Accountability in Corporate Governance”
(n 14) 11.
96
Thomas Donaldson and Lee E Preston, “The Stakeholder Theory of the Corporation:
Concepts, Evidence, and Implications” (1995) 20(1) The Academy of Management Review
65; Margaret M Blair, Ownership and Control: Rethinking Corporate Governance for the
Twentieth Century (Brookings Institution Press 1995); Lynn Stout, The Shareholder Value
Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public
(Berrett-Koehler 2012).

26
in immediate terms to shore up corporate capitalism’s reputation. Beyond
that accountable governance was articulated as the optimising of economic
efficiencies and, just as important, the maintenance – or restoration – of
corporate capitalism’s legitimacy in public eyes. The OECD Principles of
Corporate Governance put it very well in saying that “the purpose of corpo-
rate governance is to help build an environment of trust, transparency and
accountability necessary for fostering long-term investment, financial stability
and business integrity, thereby supporting stronger growth and more inclu-
sive societies”.97 Corporate governance promises minimised extraction of
rents and optimised allocations of resources. It underpins corporate capital-
ism’s emphasis on market norms. Corporations may well be bureaucratic, so
the story goes, but reward is linked to pursuit of success in markets, not to
managers capturing bureaucratic power.
Such narratives are not rhetorical in some empty sense: they involve key
logics being put to work in sustaining corporate capitalism. Nor are they
deception. They provide insiders with reasons for the actions that they take.
They allow them to perform those actions in public by setting the bounds
of legitimate behaviour. Legitimation then is not merely the soliciting of
approval (although it might be that) from an outside audience: it projects
outwards at watching publics but also reassures those on the inside that their
authority is just.98
This somewhat parallels Marc Moore’s argument above in regards to ac-
countability’s necessary role in underpinning decisional authority. Where it
differs from his perspective is in setting these legitimation practices, not in
the firm’s internal relations, but in the political economy of giant firms. Their
zones of action, constructed in collaboration with states, are to be insulated
from democratic control. This increases the scope of action both for firms
and very often for states, but also gives states approaches for relating to
globalisation in bounded ways.
It is no coincidence that corporate governance arose in response to scan-
dals as the current financialised corporate capitalism matured. In immediate
97
Organisation for Economic Co-operation and Development, G20/OECD Principles
of Corporate Governance (OECD 2015) hhttps : / / www . oecd - ilibrary. org / docserver /
9789264236882 - en . pdf ? expires = 1559656642 & id = id & accname = guest & checksum =
12BC1BC1B08D929E21E9E71728B21093i accessed 6 August 2019, 7, my emphasis.
98
On which see Rodney Barker, Legitimating Identities: The Self-Presentations of Rulers
and Subjects (Cambridge University Press 2001).

27
terms, in the UK and elsewhere, innovation in corporate governance regula-
tion has been driven by scandal. The Maxwell, Polly Peck, BCCI and other
scandals drove corporate governance reform.99 That reform quickly centered
on managing the separation of ownership and control – on internalities – is
significant. The solution to social crisis was, it seems, better private control.
How this was articulated is interesting.
Endless business collapses have been linked to managers exploiting their po-
sitions to hide failures and/or satisfy their greed. In the United States,
Enron saw a cadre of senior insiders hiding losses and lining their pockets at
investors’ and others’ expense.100 In the United Kingdom a decade before En-
ron Robert Maxwell delayed the collapse of his business through fraudulent
means while the board stood by.101 More recently Ireland’s local manifesta-
tion of the Global Financial Crisis saw the Anglo Irish Bank drive a property
bubble and undergo a spectacular implosion, taking the economy down with
it. All these were linked in the public mind and in policymaking circles to
inadequate corporate governance. Inadequate checks, it was generally as-
sumed, had allowed freewheeling managers to reap the benefits of massive
risk-taking without meaningful board oversight.102
99
See for instance Philip Stiles and Bernard Taylor, “Maxwell – The Failure of Corpo-
rate Governance” (1993) 1(1) Corporate Governance: An International Review 34 hhttp:
//onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-8683.1993.tb00008.xi accessed 16 Au-
gust 2019; Thomas Clarke, “Cycles of Crisis and Regulation: The Enduring Agency and
Stewardship Problems of Corporate Governance” (2004) 12(2) Corporate Governance: An
International Review 153 hhttp : / / onlinelibrary. wiley. com / doi / abs / 10 . 1111 / j . 1467 -
8683.2004.00354.xi accessed 16 August 2019.
100
Given that the Enron scandal effectively brought focus to the subfield of legal schol-
arship concerned with corporate governance in the United States, it is no wonder that a
substantial literature followed in its trail. See for instance Loren Fox, Enron: The Rise
and Fall (John Wiley & Sons 2003); William W Bratton, “Enron and the Dark Side of
Shareholder Value” (2002) 76(5-6) Tulane Law Review 1275; Paul M Healy and Krishna G
Palepu, “The Fall of Enron” (2003) 17(2) Journal of Economic Perspectives 3; William W
Bratton, “Enron, Sarbanes-Oxley and Accounting: Rules Versus Principles Versus Rents”
(2003) 48(4) Villanova Law Review 1023; John C Coffee, “What Caused Enron? A Cap-
sule Social and Economic History of the 1990s” (2004) 89 Cornell Law Review 269; David
Campbell and Stephen Griffin, “Enron and the End of Corporate Governance” in Sorcha
MacLeod and John Parkinson (eds), Global Governance and the Quest for Justice, Volume
2: Corporate Governance (Hart 2006).
101
see Thomas Clarke, “Case Study: Robert Maxwell: Master of Corporate Malfeasance”
(1993) 1(3) Corporate Governance: An International Review 141; Nicholas Davies, Death
of a Tycoon: An Insider’s Account of the Fall of Robert Maxwell (St Martin’s Press 1993).
102
see Simon Carswell, Anglo Republic: Inside the Bank That Broke Ireland (Penguin

28
The Global Financial Crisis has in turn also been put down to unchecked
managerial power. The UK’s Walker Review103 of corporate governance
in banks highlighted weak board capacities to scrutinise risk-taking. In-
vestor ‘time horizons’ were deemed to be too short to take a proper interest
in firm sustainability. And incentive structures were deemed to encourage
risk-taking because managers and others could accrue their often substantial
earnings by taking short-term bets on the firm with losses borne by investors
(and, again, others) when things went wrong. As a further report had it,
senior managers functioned behind an ‘accountability firewall’ given their
massive rewards in the good times and their evasion of blame when things
went wrong.104
If anything corporate governance’s remit has expanded since the Crisis as
resentment of corporate conduct has grown. Resentment – the reactive atti-
tudes adopted in the context of ‘offense or injury by the action of another’105
– focused in large part on remuneration and so on individuals within firms.106
Ireland 2011); Kenneth Patrick Vincent O’Sullivan and Stephen Kinsella, “An Institutional
Architecture for Meta-Risk Regulation in Irish Banking: Lessons from Anglo Irish Bank’s
Minsky Moment” (2011) 12(4) Journal of Banking Regulation 342.
103
David Walker, A Review of Corporate Governance in UK Banks and Other Financial
Industry Entities: Final Recommendations (the Walker Review) (2009).
104
Parliamentary Commission on Banking Standards, Changing Banking for Good: Vol-
ume I (Report of Session, HL Paper 27-I/HC 175-I, 2013) hhttp://www.parliament.uk/
documents/banking-commission/Banking-final-report-volume-i.pdfi accessed 6 August
2019; Parliamentary Commission on Banking Standards, Changing Banking for Good:
Volume II (Report of Session, L Paper 27-II/HC 175-II, 2013) hhttp://www.parliament.
uk/documents/banking-commission/Banking-final-report-vol-ii.pdfi accessed 6 August
2019; Loughrey (n 91).
105
PF Strawson, “Freedom and Resentment” in PF Strawson (ed), Freedom and Re-
sentment and Other Essays (Methuen & Co, Ltd 1974); see also Stephen L Darwall,
The Second-Person Standpoint: Morality, Respect, and Accountability (Harvard Univer-
sity Press 2006).
106
Nils Pratley, “Shell Boss’s £17.2m Pay Packet Shows the Madness of Incentive Plans”
The Guardian (14 March 2019) hhttps://www.theguardian.com/business/nils- pratley-
on-finance/2019/mar/14/shell-bosss-172m-pay-packet-shows-the-madness-of-incentive-
plansi accessed 15 March 2019; High Pay Centre, Metrics Re-Loaded: Examining Executive
Remuneration Performance Measures (2015) hhttp://highpaycentre.org/files/Metrics_
Reloaded . pdfi accessed 4 August 2015; Alan Dignam, “Remuneration and Riots: Re-
thinking Corporate Governance Reform in the Age of Entitlement” (2013) 66(1) Current
Legal Problems 401 hhttp://clp.oxfordjournals.org/content/66/1/401i accessed 11 March
2014; Marc T Moore, “Corporate Governance, Pay Equity, and the Limitations of Agency
Theory” (2015) 68(1) Current Legal Problems 431; Jeffrey Moriarty, “Risky Pay and the

29
That said, systematic concerns were also at the fore, at times in ways that
threatened both corporate and state power.107

Conclusion

The financial crisis was both a crisis in the economy and a crisis of legiti-
macy for the economy. Corporate governance regulation shifted in response.
Indeed, while the period saw growing policy-maker scepticism about it as
a vehicle for nudging businesses towards a sustainable capitalist model,108
policymakers continued to return to corporate governance regulation as a
solution for legitimacy problems. They sought out new ways to account
for public concerns. This was done, however, without disrupting corporate
governance’s core precepts and so without fundamentally altering the terms
upon which global firms’ operate. Reformed included addressing ‘culture’109
and, if not to place workers directly on boards - a democratic step that might
have been disruptive110 – at least the recruitment of ‘advisory’ panels or of
an independent director to speak on employees’ behalf.111
Financial Crisis: Who’s Responsible?” (2018) 42(1) Midwest Studies In Philosophy 156.
107
See for instance Moritz Renner, “Occupy the System! Societal Constitutionalism and
Transnational Corporate Accounting” (2013) 20(2) Indiana Journal of Global Legal Studies
941 hhttp://muse.jhu.edu/journals/indiana_journal_of_global_legal_studies/v020/
20.2.renner.htmli accessed 16 September 2014; Eva Cherniavsky, “"Refugees from This
Native Dreamland": Life Narratives of Occupy Wall Street” (2014) 37(1) Biography 279
hhttps://muse-jhu-edu.queens.ezp1.qub.ac.uk/article/558807i accessed 11 October 2017.
108
See for instance discussions in Parliamentary Commission on Banking Standards,
Changing Banking for Good: Volume I (n 104) Ch. 7.
109
Financial Reporting Council, Corporate Culture and the Role of Boards: Report of
Observations (2016) hhttps://www.frc.org.uk/getattachment/3851b9c5-92d3-4695-aeb2-
87c9052dc8c1/Corporate-Culture-and-the-Role-of-Boards-Report-of-Observations.pdfi
accessed 5 June 2019; Financial Reporting Council, Corporate Culture and the Role of
Boards (2016); Group of 30, Banking Conduct and Culture: A Call for Sustained and
Comprehensive Reform (2015) hhttps://group30.org/publications/detail/166i accessed
24 May 2019; Group of 30, Banking Conduct and Culture: A Permanent Mindset Change
(2018) hhttps://group30.org/publications/detail/3134i accessed 24 May 2019; Financial
Alphaville, Banking Culture since the Crisis (Financial Times 10 May 2019) hhttp : / /
ftalphaville . ft . com / 2019 / 05 / 10 / 1557488263000 / Banking - culture - since - the - crisis/i
accessed 24 May 2019.
110
Helen Warrell and Jim Pickard, “Plan for UK to Put Workers on Company Boards
Falters” Financial Times (31 October 2016) hhttps://www.ft.com/content/22128636-
9ece-11e6-891e-abe238dee8e2i accessed 16 August 2019.
111
Financial Reporting Council, The UK Corporate Governance Code (n 1) para. 5.

30
New elements for corporate governance compliance also include for instance
responsibilities to declare policies and procedures for promoting gender equal-
ity on the board for instance. Promoters of this policy have in general turned
to a business case for gender diversity, namely that more diverse boards with
a greater range of voices will enhance firm performance. Diversity is as a
result the ‘business of business’ and from there the business of corporate
governance regulation.
Whether or not the business case holds true – a matter of some controversy112
– we should not focus solely on how corporate governance was proposed as
a solution for non–diverse boards. It is also interesting to think about how
diversity was regarded as a corporate governance problem. Gender and other
diversity questions being incorporateed have presaged a broader turn to or-
ganisational culture as a corporate governance problem. By finding ways to
connect identifiable board members to looser and less tangible forces within
firms, corporate governance provides a narrative that promises to address
the an expanding array of legitimacy concerns. Executive tyranny has ex-
panded first to short-termist conduct reaping substantial private rewards
(before passing costs onto the taxpayer) and then to other internal dynamics
within firms. All this without disrupting the core business models
under which such firms are governed. Business conduct continues to be a
matter for the board. Neither courts nor governments get to tell businesses
what to do. And yet everybody is drawn into narratives that proport to
address societal concerns.
In immediate terms, corporate governance’s expanding remit is likely a con-
sequence of the Global Financial Crisis, followed by the Libor scandal.113 But
it also reveals the tensions inherent in a private-relationships model
for accountability in corporate governance being utilised in the
context of giant firms operating in the spaces discussed above. The
same might be said of the financial crisis and the Libor scandal of course.
Both events laid out in stark terms the social impact of financial services
functions. They also laid out the dysfunctions inherent in the ‘delegated
112
See for example Mark McCann and Sally Wheeler, “Gender Diversity in the FTSE
100: The Business Case Claim Explored” (2011) 38(4) Journal of Law and Society 542.
113
Parliamentary Commission on Banking Standards, Changing Banking for Good: Vol-
ume II (n 104); Parliamentary Commission on Banking Standards, Changing Banking for
Good: Volume I (n 104).

31
self-regulation’ to which the financial sector was subject.114 To call this
regime ‘decentered,’ as for instance Black115 does, is a misnomer. The sector
as it functioned could never be either ‘centered’ within state regulation nor
entirely privatised. That is not to say that it sits somewhere halfway between
the two. Rather, the regulatory regime set out a space within which very
specific functions could be carried out in concert with and in collaboration
with the state.
Beyond that, these crises revealed apparent new flavours to classic agency
problems, now with a more public bent. Giant firms’ complexities, them-
selves arranged around corporate ‘group’ structures allowed boards to con-
struct what came to be called an ‘accountability firewall’ between themselves,
including their ‘superstar’ CEOs,116 and conduct within the firms they (no-
tionally) governed. Banks’ complex structures and broad scope rendered
them not only ‘too complex to manage’ but “obscured senior executives’
understanding of what was really going on in the businesses they were sup-
posedly running”:

When conduct and risk failures came to light, this ignorance al-
lowed many leaders to profess their shock at what had been hap-
pening, duck personal accountability and instead blame systems
failures or rogue individuals. Many banks had a structure of
cross-cutting functions and committees which meant that key de-
cisions and risks were not owned by single executives but were
shared, undermining a sense of individual responsibility.117

Such complexity is not restricted to banks. Mining and other extraction

114
Ian Bartle and Peter Vass, “Self-Regulation Within the Regulatory State: Towards
a New Regulatory Paradigm?” (2007) 85(4) Public Administration 885; Anthony Ogus,
“Self-Regulation” in Gerrit de Geest and Boudewijn Bouckaert (eds), Encyclopedia of Law
& Economics (Edward Elgar 2000).
115
Julia Black, “Decentring Regulation: Understanding the Role of Regulation and Self-
Regulation in a ‘Post-Regulatory’ World” (2001) 54(1) Current Legal Problems 103.
116
Brian R Cheffins, “The Corporate Governance Movement, Banks, and the Financial
Crisis” (2015) 16(1) Theoretical Inquiries in Law 1.
117
Parliamentary Commission on Banking Standards, Changing Banking for Good: Vol-
ume II (n 104) para 94; on middle managers’ incentives to cheat in high-performance
settings, see John C Coffee, “"No Soul to Damn: No Body to Kick": An Unscandalized
Inquiry into the Problem of Corporate Punishment” (1981) 79(3) Michigan Law Review
386.

32
companies, for instance, use complex group structures involving multiple cor-
porate entities, each of which, in law’s imagination, is an autonomous legal
person.118 This not only ensures that liabilities are kept at arms length from
the capital-rich core, but that managers and boards keep their businesses’ less
savoury conduct farther from scrutiny than they might otherwise be119 This
fluidity is exacerbated by the large numbers of smaller firms along supply and
value chains that sit within their orbit but with whom they have no ‘owner-
ship’ relation. Toxic waste management can be handed off to partners who
are simultaneously distant and close.120 Price-focused consequences for work-
ers, or for child-labourers are passed along supply chains and thus obscured
from view, at least until everyday suffering and exploitation either gives way
to outright disaster or comes under scrutiny in home jurisdictions.121
118
Subject to conditions set out in Adams and Others v Cape Industries Plc [1990] Ch
433 (Court of Appeals).
119
See Peter Muchlinski, “Limited Liability and Multinational Enterprises: A Case for
Reform?” (2010) 34(5) Cambridge Journal of Economics 915; Peter Muchlinski, “The
Bhopal Case: Controlling Ultrahazardous Industrial Activities Undertaken by Foreign
Investors” (1987) 50(5) The Modern Law Review 545; Upendra Baxi, “Human Rights
Responsibility of Multinational Corporations, Political Ecology of Injustice: Learning from
Bhopal Thirty Plus?” (2016) 1(01) Business and Human Rights Journal 21.
120
Liesbeth Enneking, “Common Denominator of the Trafigura Case, Foreign Direct
Liability Cases and the Rome II Regulation - An Essay on the Consequences of Private
International Law for the Feasibility of Regulating Multinational Corporations through
Tort Law” (2008) 16(2) European Review of Private Law 283; Nadia Bernaz, “Enhancing
Corporate Accountability for Human Rights Violations: Is Extraterritoriality the Magic
Potion?” (2013) 117(3) Journal of Business Ethics 493; Nadia Bernaz, Business and
Human Rights: History, Law and Policy - Bridging the Accountability Gap (Routledge
2016); Catherine Coumans, “Mining and Access to Justice: From Sanction and Remedy
to Weak Non-Judicial Grievance Mechanisms” (2012) 45(3) University of British Columbia
Law Review 651.
121
For instance Juliane Reinecke and Jimmy Donaghey, “After Rana Plaza: Building
Coalitional Power for Labour Rights between Unions and (Consumption-Based) Social
Movement Organisations” (2015) 22(5) Organization 720; Noemi Sinkovics, Samia Ferdous
Hoque, and Rudolf R Sinkovics, “Rana Plaza Collapse Aftermath: Are CSR Compliance
and Auditing Pressures Effective?” (2016) 29(4) Accounting, Auditing & Accountability
Journal 617; Javed Siddiqui and Shahzad Uddin, “Human Rights Disasters, Corporate
Accountability and the State: Lessons Learned from Rana Plaza” (2016) 29(4) Accounting,
Auditing & Accountability Journal 679; Ashton S Phillips, “Transnational Businesses, the
Right to Safe Working Conditions, and the Rana Plaza Building Collapse: Toward a Tort-
Based Solution to the Global Race to the Bottom” in Jena Martin and Karen E Bravo (eds),
The Business and Human Rights Landscape (Cambridge University Press 2015); Terre des
Hommes, Beauty and a Beast: Child Labour in Mica Mining in India for Sparkling Cars

33
But again, this is not simply ‘agency costs, nationalised,’ although it is that
too. The crises arose from the tensions inherent in the spaces within which
giant firms operate. The ‘internalities’ that generate such accountability fire-
walls are inseparable from the spaces that corporate governance regimes help
construct. The logics inherent in corporate governance’s narrowed vision are,
it transpires, opportunities as well as checks. Just as giant firms’ infrastruc-
tural scale are not just facilitated by but are entirely enmeshed in enterprise
zones, shipping networks and ‘flexible’ labour-force logistics in some jurisdic-
tions,122 so they are not just facilitated by but are enmeshed in corporate
governance. Corporate governance does not just denote a framework: it de-
scribes aspects of corporate capitalism in practice. It sets out the scope of
moral interest within the firm, and of moral disinterest.

and Cosmetics (2016) hhttps : / / www . terredeshommes . nl / en / programmes / stop - child -

labour-mica-minesi accessed 6 August 2019.
122
See Easterling (n 15); also the discussion of Foxconn and other firms in Joshua B
Freeman, Behemoth: A History of the Factory and the Making of the Modern World (W
W Norton & Company 27 March 2018).

34