Nick Clegg will float proposals today, unpopular with many businesses, for staff to have a right to request shares in the company they work for, as part of his drive to turn Britain into more of a “John Lewis economy”, based on the UK retailer’s model of employee ownership. A report for the deputy prime minister proposes that if at least 10% of employees want to do so, they should have a statutory right to lodge a proposal for all staff to share in the ownership. Mr Clegg will tell a summit on employee ownership that the banking scandal is “a timely reminder that our economy desperately needs an injection of responsibility, greater checks on unaccountable power, power in more hands”. (Financial Times*, p.2)
Environment
China riot police clash with environmental protesters
Chinese riot police clashed with thousands of environmental protesters in Sichuan province on Tuesday, using tear gas to disperse demonstrators, in the latest example of escalating grassroots protests over pollution in China. Residents of Shifang, a south-western city, have been protesting since Sunday over the construction of a metals refinery that they say will endanger their health. Eyewitnesses said riot police and military Swat teams had filled the city centre after tear gas battles. In a rare victory for environmentalists, the Shifang city government and Sichuan Hongda, a Shanghai-listed metals producer behind the planned $1.6 billion copper refinery, issued statements saying they would cancel the plant and never build such a facility in the city. (Financial Times*, p.8; The Guardian, p.18)
Inclusive Business
Avon calling for South Africa’s jobless
A three-year academic study by Oxford University researchers, funded by a £160,000 grant from the British government, found that becoming an Avon lady (Avon’s representatives providing door-to-door beauty sales) in South Africa is often a route to financial independence and greater self-confidence. It found Avon representatives' income put them in the top half of black women in their communities, and brought them in line with what a black South African man earns. Avon representatives with 16 months or more in the system earned enough to cover a typical household's expenditure for food, non-alcoholic drinks, clothing, shoes and healthcare. (Guardian, p.20; Huffington Post)
Corporate Reputation
Network Rail engulfed in fresh row over directors' bonuses
Politicians and unions in the UK have denounced Network Rail plans to pay bonuses to its directors – only months after a public outcry led to the rail bosses pledging to waive their annual payouts. A leaked letter from Network Rail's remuneration committee shows it is trying to push through a long-term bonus scheme worth £1.7 million for five directors alongside annual bonuses of up to 60% of salary. It also shows it is planning to pay three directors "golden handcuff" payments of £300,000 each to stop them being poached by rival firms. (The Guardian, p.21)
GlaxoSmithKline fined £1.9 billion ($3 billion) for drug mis-selling and bribing doctors
The pharmaceutical group GlaxoSmithKline has been fined $3 billion (£1.9 billion) after admitting bribing doctors and encouraging the prescription of unsuitable antidepressants to children. Glaxo is also expected to admit failing to report safety problems with the diabetes drug Avandia in a district court in Boston on Thursday. The company encouraged sales reps in the United States to mis-sell three drugs to doctors and lavished hospitality and kickbacks on those who agreed to write extra prescriptions, including trips to resorts in Bermuda, Jamaica and California. (The Guardian, p.22)
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