Corporate governance and workplace partnerships project - Project Overview

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Project Overview

The Partnerships at Work project is a joint initiative of the Centre for Corporate Law and Securities Regulation and the Centre for Employment and Labour Relations Law. Professors Richard Mitchell and Ian Ramsay are the Chief Investigators for the project.

Project Summary

Type of Grant
ARC Discovery Project Grant

Funds Received
$640 500

Project Aims
The project will examine the interaction between several key factors in the creation and sustainability of ‘Partnerships at Work’. These factors include particular employment systems, forms of corporate governance and ownership structures. The project proposes to discover how these various factors have interacted so as to give rise to — or fail to give rise to — ‘high performance’ partnership-style relations at work.

There is a widely held view that production systems based on hierarchical management control, conflictual work relationships and low trust between management and labour (the Anglo-American model) have been less competitive than models based upon co-operative/high trust work relations (e.g. Germany and Japan). Governments in systems historically marked by ‘conflictual’ employment systems are now supporting the development of more co-operative workplace relations systems between employers and employees. In Britain this has been based in the Blair government’s ‘Third Way’ policy which actively seeks the promotion of a ‘Partnership at Work’ agenda. In Australia the Federal Government has also been pursuing a policy of ‘co-operative’ workplace relations based upon individual contracts, employee participation, more flexible working arrangements, performance appraisal, and various forms of profit sharing, including employee share ownership. More recently the Victorian Labor government has announced its ‘Partners at Work’ program designed ‘to encourage Victorian workplaces to develop partnerships with employees, unions and other shareholders…to improve workplace performance’. As a result of this policy direction, the identification of those factors which support the development and sustainability of co-operative ‘partnership-style’ workplace systems is now one of the most important issues in contemporary employment relations.

At the same time, there is debate concerning whether there will be international convergence around the Anglo-American model of corporate governance and ownership structure. The emergence of corporate governance frameworks based around highly liquid capital markets, dispersed share-ownership, vulnerability to hostile takeover bids and the presence of large institutional investors anxious for quarterly improvements can entrench a narrow understanding of ‘shareholder value’ as the dominant objective of corporate management. On the other hand, systems of corporate governance characterised by relatively concentrated patterns of shareholding, with a dominant shareholder holding a majority or near majority stake, are said to more easily establish and sustain co-operative arrangements between all relevant stakeholders, including industry employees.

This project will focus on the interaction between these factors within a regulatory environment established by labour law and corporate law. What are the elements of ‘co-operative’ or ‘partnership’ employment systems? What are the integrating institutions or conventions - if any - that incorporate workers or their representatives into managerial processes? How do company directors actually balance the interests of employees and shareholders within the framework of the obligations imposed by directors’ duties? How flexible are those duties? What possible shortcomings might exist in the practical application of those duties? Is there a congruence between types of corporate governance systems and types of employment system?