Inequality, firms, ownership and governance - Colin Mayer - An IFS initiative funded by the Nuffield Foundation

It reinforces the observation of the high concentration of regions in the UK in the lowest quartile of productivity and the comparative sparsity of regions in the other quartiles. [...] (2022), ‘Inequality, firms, ownership and governance’, IFS Deaton Review of Inequalities that underpins it and that is its regional concentration, not simply in terms of the agglomeration of financial institutions in the City of London, but more significantly in regard to their lack of connectedness with the rest of the country, in particular in relation to small and growing businesses. [...] The use of poison pills in the US is prohibited in the UK by restrictions on ‘frustrating actions’ being deployed by target companies, the absence of ‘staggered boards’ that can delay the replacement of members of the boards of target firms in the US, and stronger removal rights of directors in the UK deriving from one-year terms of the office of director. [...] The reason it is getting worse is not only the emergence of hostile takeovers in the UK in the 1960s and then hedge fund activism in the 2000s, but also the changing nature of the ownership of UK firms. [...] It has resulted in a failure of large parts of the privatised utilities to fulfil their promise, and repeated conflicts between regulators and regulated companies in response to unacceptable performance of privatised firms.5 It is not just the ownership and control of companies that has been the cause of a failure of productivity and inequality across firms and regions.