Catherine McBride, ‘Whose Company Is It Anyway? The Benefits of Unprotected Capitalism and Unruly Shareholders’

ABSTRACT
Free-market capitalism requires creative destruction. It is important that poorly performing companies are allowed to go out of business or allowed to be taken over, and it is equally important that new companies are able to replace them. If company management is not maximising shareholder value, then the shareholders should be entitled to act. Government regulations should not protect a company’s management, executive board or supervisory board from shareholder disquiet. The UK remains Europe’s best protector of shareholder rights and should not protect the so-called ‘national corporate champions’ – doing so requires the government to pick winners by trying to decide which businesses should be protected. Instead, the government should let market forces decide. When governments support failing sectors or companies, they are harming competitor companies, entrepreneurs, and innovators as well as the taxpayers and consumers who end up covering the additional costs of government protection.

McBride, Catherine, Whose Company Is It Anyway? The Benefits of Unprotected Capitalism and Unruly Shareholders (April 29, 2019). Institute of Economic Affairs.

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