Corporate Reforms Under Andy Burnham: A Trojan Horse for Neoliberalism?

Corporate Governance Under Pressure

As Andy Burnham's Labour government touts its vision of a fairer economy, a recent consultation on corporate reporting reveals a troubling contradiction: the reforms are designed to entrench neoliberalism rather than dismantle it. The consultation, initially framed as a move to reduce red tape, actually undermines efforts to hold corporations accountable to workers and communities.

"The question of what corporations are for is deeply political," I observed while reviewing the latest proposals from the Department for Business and Trade. "In 1970, Milton Friedman argued that business's only social responsibility was to increase profits. The ideas he championed still define corporate culture today."

At the heart of this controversy is a fundamental misunderstanding about the role of the modern corporation. The consultation proposes removing key disclosures—like CEO-to-worker pay ratios—that would expose systemic inequality. It's a move that signals not reform, but regression.

Milton Friedman's Legacy Lives On

As we dig into the roots of current policy thinking, it becomes clear how deeply entrenched Friedman's doctrine still is within British corporate culture. His assertion in 1970 that businesses exist solely to make money remains a cornerstone for many executives and policymakers. The idea that companies should be viewed as vehicles for enforcing political agendas—particularly those rooted in free-market fundamentalism—is not just outdated, it's dangerous.

In an era where wealth concentration threatens democratic institutions, the government's choice to abandon transparency measures like pay gap disclosures sends a message loud and clear: shareholder value trumps social responsibility. And yet, despite Burnham's campaign promises to end neoliberalism, this consultation appears to be just another attempt to preserve its structures.

What the Proposal Really Means

The proposed reforms include removing mandatory annual shareholder votes on executive pay—a policy introduced by Theresa May's Conservative government as a modest attempt to curb boardroom excess. Now, Labour seems ready to discard that measure without even a moment's reflection. These changes suggest a troubling alignment with the GC100 lobby group of corporate leaders who have long fought against any oversight of executive compensation.

What's more concerning is the proposal to allow companies to move entirely to virtual annual general meetings (AGMs). While this may sound appealing in terms of accessibility, the evidence tells a different story. Virtual AGMs often result in fewer questions from shareholders and significantly less engagement—particularly when it comes to critical issues like environmental responsibility or worker treatment.

In fact, more than half of BP shareholders voted against allowing online AGMs earlier this year, citing concerns over accountability. The same principle applies here: when people can't be present, the pressure on executives to answer tough questions disappears. This isn't about streamlining processes; it's about eroding democratic participation in corporate decision-making.

Corporate Accountability Through Transparency

Transparency should be at the core of any healthy corporate governance framework. It's not only a matter of fairness—it's essential for sustainable business practices and public trust. That's why proposals to eliminate disclosures on pay disparities, environmental impact, or stakeholder engagement are so alarming.

The research by legal scholars shows that when companies include workers on boards, transparency increases and ethical conduct improves. Yet the current government consultation makes no such provision, instead focusing on reducing reporting burdens for businesses.

This is a classic case of regulatory capture—where policy decisions are shaped by corporate interests rather than public interest. By failing to require disclosure of key metrics like living wage compliance or worker representation, we allow corporations to continue operating with minimal oversight.

Alternatives: B Corporations and Beyond

There are better models out there. In the United States, B Corporations have gained traction as companies committed to balancing profit with social good. These organizations must meet rigorous standards for transparency, accountability, and impact. While not yet widespread in Britain, they offer a blueprint for how corporate governance can be reimagined.

Some forward-thinking firms are already moving toward voluntary approaches that prioritize stakeholder value over pure shareholder returns. The challenge now is to make these values mandatory across all public and private enterprises—not just those with a conscience.

Instead of continuing down the path of deregulation, Labour should take bold steps to reverse course. We need corporate reporting standards that reflect a broader understanding of what business should achieve: economic growth, social progress, and environmental stewardship. If Burnham truly wants to end neoliberalism, he must begin by rejecting policies that reinforce it.

The Risk of Inaction

What's at stake here is not just corporate reform—it's the future of democracy itself. When companies operate behind closed doors, shielded from scrutiny, we lose sight of who they really serve. As a journalist investigating these issues, I've seen how the absence of transparency leads to abuse, exploitation, and erosion of public trust.

If the government truly wants to honor its pledge to challenge inequality and strengthen democratic institutions, it must act decisively. It's time for meaningful reform—not cosmetic changes that hide behind buzzwords like "streamlining" or "efficiency." The consultation must be scrapped, and a new framework developed—one that puts society first.

Corporate governance is not neutral—it's ideological. And the decisions made today will shape how Britain's economy functions tomorrow. Let's make sure those decisions reflect justice, not just profit.