Business Elites and Corporate Governance in France and the UK

Published by EH.NET (November 2006)

Mairi Maclean, Charles Harvey and Jon Press, Business Elites and Corporate Governance in France and the UK. Basingstoke: Palgrave Macmillan, 2006. xvii + 357 pp. $66 (hardcover), ISBN: 1-4039-3579-3.

Reviewed for EH.NET by Hugo Cer?n-Anaya, Department of Sociology, University of Essex.

In the current world, international corporations are able to control more human and economic resources than many nation states. The economic influence of these companies goes far beyond stock markets; they have a real impact on people’s lives, as the case of Enron showed in the U.S. In this context it is worth asking, who governs corporations? How are top executives appointed? Is economic globalization changing corporate governance practices? Mairi Maclean (University of the West of England), Charles Harvey (University of Strathclyde) and Jon Press (Bath Spa University) seek to answer these questions in a comparative study of England and France during the late twentieth and early twenty-first century.

In eight chapters the book covers issues such as the role of social elements in shaping business elites; the impact economic globalization is exerting on French and British business elites; corporate government structures; and recent transformations of corporate governance practices. These topics allow the authors to present a portrait of the men – and, to a lesser extent, women — who run the top corporations in these two countries. The contribution of this research is to expand the literature on international business; elites; social spaces; and social networks, in France and the UK. In this sense this book may appeal to business historians, economic sociologists and scholars researching elites, as well as academics analyzing social capital and networks.

In the Introduction the authors place their research within the context of studies of business elites. Their main objective is to analyze how governance practices (rules, regulations and practices) are influenced by national systems (business systems, structures, relationships) and ideologies (ideas, beliefs, values and assumptions) in the face of far-reaching global change. The findings of this study are based upon qualitative and quantitative data, the latter referring to statistical information about the directors of the top 100 companies in Britain and France, which is complemented by in-depth interviews.

Chapter 2, on ‘Theoretical Perspectives,’ discusses diverse theoretical approaches to the study and understanding of power and elites. The authors mainly draw ideas from Michael Foucault, Pierre Bourdieu, John Scott and Mark Granovetter. One of the main strengths of the book is precisely this attempt to understand business elites in a more complex way, taking into account social factors and national ideologies, not just economic elements. In Chapter 3, ‘Governance Regimes in Comparative Perspective,’ the authors seek to answer the question of how power works on French and British corporations, and review the main transformations experienced in corporate governance in both countries. The conclusion is that the UK and France have dealt with these matters in very different ways. For instance, British corporations have clearly separated the functions of CEOs and chairmen in different posts, whereas in France it is common to find one person simultaneously holding both roles.

Perhaps the most interesting chapters of the book are Chapter 4, ‘Social Origins and the Education of Business Elites,’ and Chapter 5, on ‘Elite Career and Lifestyles.’ These explain how social structures profoundly determine the shape and composition of business elites. The authors state that their analysis is not deterministic, but mention certain observable regularities in recruitment to the business elite. Chapter 4 mainly explores the importance of family and education for increasing an individual’s possibilities to join the business elite.

They conclude that education systems and the recruitment of business elites gradually have become more open in both countries, “nevertheless whilst undertaking this study we have been startled by the degree to which elitism still applies” (p. 122). Chapter 5 examines how top executives in France and the UK reached the positions they hold, and whether lifestyle patterns have influenced these businessmen’s careers. Issues such as the importance of sports, cultural and academic patronage, and marriage are analyzed in this chapter. The explanation that the authors give about why women are underrepresented in top corporate positions in both countries is of particular interest.

Chapter 6, ‘Networks, Power and Influence,’ studies the way elite business networks operate within these countries. The authors analyze how frequently top executives hold board positions in different companies, and also the impact family ties have on business networks. They conclude that the pattern is different in each country: in France ties are institutionally created through the grande ?coles, grands corps and business associations; whereas in the UK, the clubs of Pall Mall, the arts boards, not-for-profit groups and sporting associations are the key spaces for networking.

Chapter 7, on ‘Corporate Governance and the New Global Economy,’ evaluates the impact economic globalization has exerted on corporate governance practices and the composition of business elites. It explains that Britain and France have taken different paths to cope with globalization. The UK has indeed followed a liberal path, while France, by contrast, has combined elements of economic regulation with liberal practices. They conclude that, despite the influence that the British Code of Conduct exerts in global corporations and of so-called ‘Americanization,’ “the systems of governance obtaining in these two countries are rooted in each case in a distinct ‘habitus,’ the origins of which go deep” (p. 236).

The final chapter, ‘Elite, Power, and Governance,’ sums up their main findings. Regarding the nature of networks, the authors explain that social ties among French business elites are institutional and strong in nature. By contrast, social bonds among the British business elite are expressly social and relatively weak. In both cases, a strong tendency towards cultural reproduction was found. This means that continuity, and to some extent reinforcement, of values, ideas and perceptions of the world are encouraged among business elites. They add that the main structures that determine success in the business sphere in both countries are family, education and professional bodies.

The authors conclude that these two countries have responded in a different ways to the new global scenario. The British economy has gradually moved towards services whereas the French have supported large-scale manufacturing enterprises. “What we are witnessing, in effect, are the responses of two competing capitalisms to globalisation” (p. 256). Probably one of the main findings of the book is precisely that there is no trend of convergence between the French and British corporate governance systems. Instead, there are strong national traditions that have encouraged divergence.

Hugo Cer?n-Anaya is a Ph.D. candidate in the Department of Sociology at the University of Essex.