British business needs to put its money where its mouth is or prepare for a social reckoning

These knee-jerk responses must be avoided this time round. Business owners, investors and executives have to understand and accept that everything they thought they knew about coping with a recession no longer applies. Society is unlikely to look kindly upon such behaviour.

The most important question we face is how to try to keep people in work. Redundancy can never be entirely avoided in a dynamic economy. But it should always be a last resort, rather than, as it has been too often in the past, a first response.

Preserving jobs wherever possible makes economic and social sense. Furthermore, there is a world of difference between accepting the need for some posts to become redundant as part of a creative process of reshaping a business and using redundancy as a blunt instrument to slash costs and increase profits.

However, the revolution in business behaviour must go far beyond job protection, critically important though that is. It involves a fundamental reappraisal of business structures, starting with what is perhaps the strangest yet barely noticed of commercial institutions: limited corporate liability.

The British Plc, the French Societe Anonyme, the American “Inc” corporations, and the German Aktiengesellschaft industrial giants are taken for granted these days. Few question the extraordinary legal fiction they all rest on: that a company is a person in its own right, quite separate from those who own or control it.

Historically, limited liability has been justified as delivering two socially useful benefits.

The first is that it allows people to take commercial risks, safe in the knowledge that the limited company provides some protection for their personal assets should matters go awry.

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