OBITUARY:Stakeholder precedents

From Dr Michael de Podesta

Sir: I have been surprised that, in the debate on the concrete meaning of the term "stakeholder", little attention has been drawn to the relevance of developments in the ownership of building societies. The mutual structure of building societies made stakeholders of both staff and customers, investors and borrowers. At the instant at which the societies are privatised, this stakeholding is preserved since the institution is still owned by its staff and customers. However, as share ownership by customers becomes diluted over the years, it becomes in the interests of ex-members wearing a shareholding hat to seek higher returns on their "investment".

Building societies are (or were) examples of how stakeholding could exist in a real complex world. However, the destruction of mutuality by get-rich-quick merchants at the head of the societies shows how delicate mutual structures are, and how they must be protected by law. Share ownership - unless restricted to customers and staff - is not stakeholding; it's just plain old capitalism.

Sincerely,

Michael de Podesta

Birkbeck College

University of London

London, WC1

22 January