Saturday, November 14, 2015

Bully Boy Behaviour in Corporates and why it's almost endemic. The Free Market is imaginary

Bully boy behaviour condenses in pretty much any situation where it's not legislated against. Corporate behaviour is dominated by the NEED for the company to regard the benefit of its owners over the benefit of the people who are the company's source of income generation, its workers... The John Lewis Partnership, including Waitrose etc, is not a perfect corporate entity by any means - they have an environmental footprint that is conventional, their ethics toward their supplier chain are 'ethical' generally only by comparison with the gutter level of bad treatment in the sector overall but John Lewis has an enviable reputation for being a wonderful employer (employees typically get an annual bonus that is equivalent to many weeks' regular pay) and retailer who listens to its customers delivering best customer satisfaction in its market segment consistently, year after year. People LOVE the John Lewis Partnership.

What most people don't understand is that John Lewis is ONLY as benign as it is, relative to the other major retailers (and more successful now) because its founder, John Spedan Lewis spent years working through the minutiae and details of a fair form of conduct - the John Lewis Constitution - with a solicitor before making the company an Employee Ownership Trust... the constitution is that institution's own form of internal regulation.

"Our Constitution
Not many companies have a written constitution that sets out their principles, governance system and rules. The John Lewis Partnership does, for two reasons as explained below."

'The first is historical. The John Lewis Partnership exists today because of the extraordinary vision and ideals of our Founder, John Spedan Lewis, who signed away his personal ownership rights in a growing retail company to allow future generations of employees to take forward his 'experiment in industrial democracy'. Not unreasonably, he wanted to leave some clear guidelines for his successors, so that the values which had motivated him would not be eroded with the passage of time.

The second reason looks forward. Spedan Lewis was committed to establishing a 'better form of business', and the challenge for Partners of today is to prove that a business which is not driven by the demands of outside shareholders and which sets high standards of behaviour can flourish in the competitive conditions of the third millennium. Indeed, we aim to demonstrate that adhering to these Principles and Rules enables us over the long term to outperform companies with conventional ownership structures.

The Constitution states that 'the happiness of its members' is the Partnership's ultimate purpose, recognising that such happiness depends on having a satisfying job in a successful business. It establishes a system of 'rights and responsibilities', which places on all Partners the obligation to work for the improvement of our business in the knowledge that we share the rewards of success.

The Constitution defines mechanisms to provide for the management of the Partnership, with checks and balances to ensure accountability, transparency and honesty. It established the representation of the co-owners on the Partnership Board through the election of Partners as Directors (Elected Directors) and it also determines the role of the Partners' Counsellor.'

Download our Constitution (PDF size: 1.98MB)

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