Employee Shareholding and Participation in Corporate Governance

Lord Cotter Excerpts

Thursday 11th October 2018 Lords Chamber

[Lord Cotter (LD)]

My Lords, I believe that the debate today is vital, thanks to the noble Lord, Lord Haskel. I will concentrate on two aspects: leadership and management. In the 1950s, I left school, did national service and then went into a small manufacturing company, which was run along the lines of “them and us”, “us and them”. After two years I left because I could not stand the way it was run. I then started my own small business. I mentioned school because I studied the fact that businesses are not always run well. I learned that businesses were badly run in the 1930s. However, there was one mill owner we studied who ran his business well when it came to the employees.

The business I originally worked for when I left school survived, and after many years I was asked whether I would return, which I did. Within a year the managing director died, so I was asked to replace him. Immediately I changed how it was run, setting up teams around the machines, working with the workforce co-operatively. Within a short time, the firm lifted off the ground. After a few years I got involved in politics, became an MP and was very busy. So in the company we decided to change things. We involved the workforce more than ever, and in the end gave the company to the workforce to run. It is successful now and running very well as a small manufacturing company.

From my experience, I have learned that good management is essential. It is often said that productivity in the UK is not good. I believe that lack of productivity follows poor leadership. It is not only businesses—many sectors are not well managed. There is a need for training in management. Leadership is so important. Bringing people with you and listening to them is vital. Our culture has to change.