ACCA-打造未来业务- BUILDING FUTURE BUSINESS

AboutACCA.

Aboutthisreport.

WeareACCA(theAssociationofCharteredCertifiedAccountants),theonlytrulyglobalprofessionalaccountancybody.

Sincewewerefoundedin1904,we’vebeenbreakingdownbarrierstotheaccountancyprofession.Todayweproudlysupportadiversecommunityofover257,900membersand530,100futuremembersin180countries.

We’reredefiningaccountancy.Ourcutting-edgequalifications,continuouslearningandinsightsarerespectedandvaluedbyemployersineverysector.Theyequipindividualswiththebusinessandfinanceexpertiseandethicaljudgementtoleadanddrivesustainablevalueinorganisationsandeconomiesworldwide.

Guidedbyourpurposeandvalues,we’releadingtheaccountancyprofessionforachangedworld.Partneringwithpolicymakers,standardsetters,thedonorcommunity,educatorsandotheraccountancybodies,we’restrengtheningandbuildingaprofessionthatfocusesonpeople,planetandprosperitytocreatevalueforall.

Theeconomicactivitiesofbusinessplayahuge

roleinshapingtheenvironmentinwhichwealllive.

Wecannotignorethefutureimplicationsofhowbusinessconductsitselftoday.Thisreportexploreshowbusinessgoals,andthewaytheyarepursued,areframedbytheunderlyinglegalformat.Themostinfluentialbusinesses,multinationalcorporations,sharecommonfeatureswiththeirrootsintheearlyhistoryofcorporategovernance;weconsiderwhetherthepurposeofthosefeaturesremainsrelevant,andwhetherthemechanismsthroughwhichtheyareimplementedarestilldoingthejobtheyweredesignedfor.

Businessstakeholders,whetherprovidingresources,receivingvalue(inwhateverform)orboth,betweenthemhaveaninterestinalltheimpactsofthebusinessonsociety.Ifthereisatensionbetweenmanagement’slegalobligationsandthosebusinessstakeholderinterestshowshouldweaddressthat?Canadditionalchecksandbalanceslikereportingrequirementsmeetthischallenge,ormightmorefundamentalreformbeneeded?

Findoutmoreat

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Contents.

Aboutthisreport2lntroduction4Backgroundtohowthelimitedliabilitycompanyrosetoprominence6Theinteractionwithaccountancy12Wherearewenow?14Wheredowegofromhere?16References18ACCA’sglobalpolicypriorities19

Introduction.

Whydogoodbusinessesmakebaddecisions?

Theanswer,ofcourse,isthatbusinessesdon’t

makedecisions,humansdo.Butwhydohumans

makethedecisionsthattheydo–andinparticular,whydopeopledothingswhichonanyobjective

analysismaketheworldasawholeaworseenvironmentforeveryone?

Societyisbuiltoneconomicactivity,andeconomicactivity

dependsuponbusiness.Aligningtheobjectivesofprivate

enterprisewiththoseofsocietyshouldofferthemostefficientpathtomeetingtheobjectivesofsociety.

‘Ithoughtwhatwasgoodforourcountrywas

goodforGeneralMotors,andviceversa.’

CharlesErwinWilson,CEOofGeneralMotors(1953).

Buttheimpactofbusinessonsocietyisnottheaggregateofthe

recognised‘results’ofeachindividualbusiness–becausethewaywemeasurebusinessisnotthewaywemeasuresociety.Butifwemightneedtochangethewaywemeasurebusiness,weneedtounderstandnotjustwhatwemeasurebutalsowhywedothat–

boththetheoryandthepractice,whetherthepracticalreasonsaredrivenbytechnology,politicsorotherfactors.

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Imaginetwosmalllightindustrialunits,sittingsidebysidenexttoariver…

Fromtheoutsidetheylooksimilarbutinsidetellsadifferentstory.Unit1hostsasmallbusinessmanufacturingorganicwaterfilter

kitsfordistributiontocharitiesworkinginwarzones,disasterrelief

andthelike.Thebusinessmakesapointofemployingthosewho

mightotherwisefinditdifficulttogetwork–theunitisentirely

wheelchairaccessibleandoptimisedforemployeeswithimpaired

vision.Severalareformerconvicts.Manyworkpart-time,either

becausetheycannotmanageafull-timeroleortofitaroundcaringobligationsathome.Thebusinesspridesitselfonpayingabove

alivingwage(prorata)andofferingemployeesupportaswellas

givingbacktothelocalcommunity.Asaresultitpaysnexttonotaxasitmakeslittleornoprofitinatypicalyear,andthepreponderanceofindividualsearningatorbelowincometaxandsocialsecurity

contributionlevelsmeansitpaysrelativelylittlethere.Muchof

whatmightotherwisebeprofitisdonatedtolocalcharities,andthebusinessisasignificantlocalemployer.

Unit2isthehomeofadisposablevapemanufacturer.Itssmall,

highlytrainedworkforceofskilledsupervisorsoperateacapital-

intensive,highlyautomatedandenergy-hungryproductionprocesswhichcreatessignificantquantitiesofpollutingbyproducts;theunitdrawswaterfromtheriverforcoolingandhasseveralconvictionsforpollutionoffences(allpaidoffswiftlyfromitshandsome

financialprofits).Thesmallteamofhighlypaidworkersaccountforsignificantincometaxandsocialsecuritycontributions,although

mostofthemlivesomedistancefromthesite,andwhilethe

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parentbusinessensuresthatitsaffairsareefficientlymanageditneverthelessmakesahealthyprofitmarginonwhichcorporationtaxesarepaid.

Viewedobjectively,theonlymeasureonwhichthesecondunitlookslikethebetterbusinesstohaveinyourcommunitymightbethetaxes–buteventhosearemostlycollectedanddistributedcentrally,soit

wouldnotreallymatterwhereitwaslocated.Thebusinesswewouldwanttoencourageisthefirstone–bothitsoutputsandthewaytheyproducethemarebetterforpeoplethanthoseofthesecond.

Andyetmuchoftheglobaleconomyisdrivenbytheconceptof

‘investment’–shareholdersexpectareturnontheircapital.Andanyconventionalfinancialadviserwouldpreferthesecondbusiness.

Ifcommercialpressuresdroverentsup,eventhoughthephysical

inputsandoutputsofbothbusinessesmightremainthesame,theirfinancialpositionwouldchange–andunderthecompanylawsof

mostcountries,itwouldbethefirstbusinessthatwouldbethemostlikelytobecomeinsolventandbeforcedtoceasetrading.

‘Ifeconomicactivityissupposedtobenefitsociety,howhaveweendedupwithan

economicmodelwhichseemstodotheopposite?’

Answeringthatinvolvesdefiningwhothestakeholdersare,andwhat“value”meanstothem.Fromahumanperspective,asafeplaceto

livewithreliablesuppliesofhealthyfood,cleanwaterandphysical

andsocialinfrastructure(suchasroads,healthcareandeducation)

willbemoreimportantthanmonetarywealth–buttheactivitywhichdeliversthoseprioritiesdependsabsolutelyonflowsoffinanceandmonetaryvalue.Gettingthebalancerightinaglobaleconomywheretheconnectionbetweenstakeholdersanddecisionmakerscan

stretchacrosscontinentsmaymeanrethinkingtheparameterswithinwhichdecisionsaretaken.

Backgroundtohowthelimitedliabilitycompanyrosetoprominence.

Earlyadventures:poolingofriskandcapital

Humaneconomicactivityhasalwaysbenefitedfromcooperation

andcollaboration.Fromtheearliesthuntersworkingtogetherto

bringdownlargerpreytotheconstructionofbuildingsorboats,

jointenterprisedeliversdisproportionatemarginalreturns.Withthedevelopmentofcurrencyandmorecomplexeconomicsystems,

theconceptofaggregationofcapitalledtothedevelopmentofvariousdifferentarrangementsforpoolingresources.

TheRomansocietatesmodels,oftencitedasthebasisforearly

Europeantradingmodels,allowedforpoolingofriskandcapital,

althoughtherewasnolimitationofliability,somemberswerefullyexposedpersonallytoanylossesfromthebusiness(Hirst2011).

Theseformswereapopularwayoftrading,andwereusednot

onlyfortradinggoods,suchasoil,wineandgrain,butalsofor

financialservicesandmaritimeadventuring.Althoughthe‘private’formwoulddissolveonthedeathofoneofthepartners,thelarger,morespecialisedsocietaspublicanorum,usedforstateactivities

suchaslargephysicalinfrastructure,miningofpreciousmetalsand

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taxfarming,hasbeenarguedtohavesharedmanyofthefeaturesofthemoderncorporation(Malmendier2008).Individualswere

abletorepresentthebusiness,enteringintobindingcontracts

onitsbehalf,andtobuya‘share’intheundertakingwhichcouldbesoldon.Theentitywouldcontinuetoexistonachange

inpartnership,andthereisevidencethatitwasabletoholdcommunalpropertyinitsownright.

TheIndiansrenimodelsharedevenmorefeatureswithmodern

corporations(Khanna2005).Separatelegalentitieswith

centralisedmanagement,srenihadcomplexinternalruleswith

anelementofinsulationfromliabilityforthemembers.Individualscouldenterandexitthestructure,andthereissomeevidence

fortransferabilityofinterestalongthelinesofmodernshare

capital.Formationwasrelativelysimpleandstatesanctioned,withestablishedinternalgovernancemodelsthatrecognisedmanyofthesameissuesasmoderncorporatemodelsthatcanarisefromthefailureofincentivesformanagementtoalignwiththegoalsofcapitalowners,andsolutionsthatsharemanycommonfeatures.

Themainconceptualdifferencewasthelackofformallimitsontheliabilityofcapitalownerstotheliabilitiesofthebusiness,afeaturewhichwewillconsiderinmoredetailbelow.

‘srenihadcomplexinternalruleswithanelementofinsulation

fromliabilityforthemembers.Individualscouldenterandexitthestructure’

Table1‘ComparingUSandancientIndiaorganisationalforms’.

(adaptedfromKhanna,V.S.(2005),‘TheEconomicHistoryoftheCorporateForminAncientIndia).

ORGANISATIONALFORM

Characteristics

ModernUSCorporation

AncientIndianSreni

Separateentity

Yes

Yes

Centralizedmanagement

Yes

Yes

Transferabilityofinterest

Yes

ProbablyYes

Limitedliability

Yes(thoughrecently)

ProbablyNot1

Agenthaspowertobindentity?

Yes

Yes2

Managementelected?

Yes

Yes(thoughattimesappearshereditary)

Canmanagementberemoved?

Yes

Yes

Dutyofloyalty

Yes

ProbablyYes

Dutyofcare

Yes

Yes

Liabilityinsulation

Yes

Yes(lessdetailedthanUS)

Internalruleshavebindingeffect

Yes

Yes

Formationiseasy

Yes

Yes

Registerwithstate

Yes

Yes

Stateapprovalneeded

Yes(thoughweak)

Yes

Useofincentivepayments

Yes

Yes(lessdetailedthanUS)

Entryiseasy

Yes

Someconditions,butnocastebars3

Sharingofassetsandliabilities

Termsofagreement

Termsofagreementandadditionalrules

Exitiseasy

Yes

Yes,butwithobligations,potentially

Board/CommitteeIndependence

Yes

ProbablyYes

VotingRegulation

Yes

Yes(lessdetailedthanUS)

Transparencyisvaluableanddisclosureisencouraged

YesProbably

Yes(lessdetailedthanUS)

1Thereislittlereasontobelievethatthesrenimembersborejointandseveralliabilityforallsreniobligationsyeteachmember’sliabilitywasnotlimitedtotheinitialinvestmentamount.Perhapsakindofprorataliabilitymayhavebeenmorelikely.

2Theheadmanandofficersofthesrenicouldbindthesreniincontractualmatters.Sometimesothermemberscouldbindthesreni,butonlywiththeapprovalofthesreni.

3Uponentrysomepaymentofcapitalcouldbeexpected.

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Astechnologyadvanced,themagnitudeofinvestmentrequiredtosupportthephysicalinfrastructureandmachinery,whetherroads,

bridges,millsorships,drovethedevelopmentofdedicatedlegal

investmentstructuresthatallowedfortheaggregationofriskand

theefficientallocationofcapitaltomanagersabletomaximiseuseofthatcapital.Thedistinctionbetweenstateoperationsandprivateenterprisehadyettoemergeclearly,withdirectandspecific

authorisationofeconomicoperationsfromtheheadofstateor

equivalentbeingcommon.Duringthe19thcenturythismodel

begantochange,aspopulationsgrewandtechnologyallowedforandevenencouragedgreaterspecialisationatincreasingscale.

Theimportanceofraisingexternalcapital

Themajorityofmodernlargebusinesses,andmanysmallerones,operatethroughjointstockcorporationswithlimitedliability.Whileeachcountry(or,insomecases,tradebloc)hasitsownspecific

variant,therearecertaincommonkeyfeatures.

That’snogreatsurprise–today’scorporateformwasinitially

developedinwesternEurope:thebasicfeatureswerehighly

attractivewhilecolonialexpansionensuredwidespread

adoptionandretentionofthelegalspecifics.Asbusinessand

technologydroveeachotherforwardtocreatetheconceptofthemultinational,economicactivitycametobedominatedbythelegalformsofthelargestindustrialisednations.

Butwhatwerethefoundationsofthecorporateform,andhow

hasthealignmentofthosefoundationsinfluencedbehaviouranddecisionmakingeversince?Developmentcontinuedtofollow

parallelcoursesinmanycountriesbutbyfocusingonasingle

jurisdictionwecanbettermakeoutthewebofinteractingfactors

‘…earlycorporategovernancestill

hadmanyflawsandinvestmentwasbynomeanswithoutrisk.’

whichaffectthecomplexrelationshipbetweenbusinessregulationandsociety.TheUKisanidealmodelbeingheavilyresearched

andhugelyinfluentialonthedevelopmentofbusinessregulation.

Inthe17thand18thcenturiesthemajorityofnewlyformedjoint

stockcompaniesintheseafaringtradingnationsofnorthern

Europehadasimplefunction;theyallowedmerchantstopooltheircapitalandrisksfortradingvoyages.Thelegalformdeveloped

tomanagethatprocesswasdesignedtogivetheinvestors

(shareholders)adegreeofcomfortthattheirmanagerswould

accountproperlytothemfortheprofits.Suchcompanieshadno

otherrealstakeholdersastheyhadfewrecurringcustomersor

creditors,andnoseparatecorporateresponsibilitytowidersociety.Maximisingtheshareholderreturnoneachindividualvoyagewastheobviousaim.

Whiletheeconomicmodelwasinmanywayssimilartolater

businessforms,theseearlycompanieswereformedforspecificpurposesandwereconducted,intheDutchandEnglishmarketsthatfosteredthemostsuccessfulventures,withstateapproval

and,initially,fortheprimarybenefitoftheexchequer.TheBritishEastIndiaCompany(1600–1874)andtheDutchVereenigde

OostindischeCompagnie(1602–1799)(commonlyknownastheDutchEastIndiaCompanyortheVOC)werebothgrantedstatemonopoliesovertradewiththe‘Eastindies’,andoperatedfor

centuries,exercisingincreasinglevelsofeconomicandpoliticalcontrolovertheterritorieswithintheirspheresofinfluence.

Butforallthefinancialsuccessesofthesetwomodels,early

corporategovernancestillhadmanyflawsandinvestmentwas

bynomeanswithoutrisk.TheSouthSeaCompany,foundedin

1711,becameabywordformarketfailureintheUKwhenitsstockscrashedonpoorresultsin1720,whiletheill-fated‘Mississippi

Company’(CompagnieD’Occidentfrom1717–1719,andCompagnieDesIndesfrom1719)collapsedin1720,causinghugedamageto

theFrencheconomy(Frentrop2003).

Theimpactoftechnologicalchangeandits

interactionwithlegalmechanismsregulatingbusinessbehaviour

Variousformsoftransportbenefitedfromthesedeveloping

mechanismsforfinancinglarge-scaleeconomicactivity:first

canalsandthen,moreimportantly,railways.Theconcentration

ofmanufacturinginfactoriesbroughteconomiesofscalefor

manufacturersand,intheory,lowerpricesforconsumers.Butroadtransportwasslowandunpredictable,and,forheavyandbulky

cargoessuchascoalorclay,veryexpensive.Britishbusiness

hadalreadyreapedthebenefitsofseatransportforshipping

coalsfromNewcastletoLondonand,astheindustrialrevolutiongatheredpace,thoughtsturnedtooptimisingtransportoninlandwaterways.Canalswereanidealsolutionfortheearlyindustrial

economy.Theiradvantagelayinmovingheavyandfragilegoodsoverlongdistancesforrelativelylittleenergyinputandatfar

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lessriskofbreakage,crucialforegthepotteriesoftheEnglishmidlandsshippingproductstomarkets.Theirrouteswerefixed,however,andtheconstructionofcanalswasnotonlymassively

labourintensivebutalsoreliedonthegoodwillofthelandownersthroughwhoseestatestheypassed–andinthecaseofpre-

industrialEnglanditwasthelandownerswhostoodtobenefit

fromcollaboratingwiththefactoryownerstofinancethenew

infrastructure.WiththeireasyaccesstoParliamenttobenefitfromthedelegatedauthorityofthecrowntooperatetheirjointstock

ventures,investorsinthecanalmaniaofthe1790shelpedtolinktheindustrialcentresoftheUKwhilemakingsignificantfinancialprofitsforthemselves,atthecostofpermanentlyalteringthe

landscape.

Astheindustrialrevolutiongatheredpace,theshiftinsteam

technologyfromstationarytolocomotiveenginesdroveanother

leapinboththephysicalandlegalcharacterofeconomicactivity.

Whileearlyrailwayswerelittlebetterthanroadtransportatcaringfordelicatecargoes,theyhadonemassiveadvantageoverboth

roadandcanaltransport:speed.Thefirstpostalserviceswere

carriedbytrainin1830(Gibbs2025)andhadcompletelydisplacedtheoldroad-boundmailcoachesby1846(PostalHeritageTrust

2005).Dairyproductscouldbetransported,fresh,tocitycentreswhilepeoplecouldnowtravelreliablyfromonecitytoanotheratsettimesandfarmoreswiftlythanhadeverbeenthecase.

Whereearlierventureshadtendedtobringtogethermerchantsandtraderswithadirectinterestinthesubjectmatterofthe

activities,subscriptionstothejointstockrailwaycompaniesdrewinvestmentsfromafarwiderrangeofstakeholders.Thewide

varietyofgoodsthatcouldbecarried,andservicesthatcouldbefacilitated,byrailexpandedthedirectappealofinvestinginrailtransport.AttheheightoftheRailManiain1845–1847over

1,000routeswerecontemplatedand330railwayActspassed-in1846alonemorethan700railwayBills(proposalsforActs)were

introducedtoParliament(ShawTayloretal,2018,UKParliament 20261).Yetmanyofthesewereneverbuilt,orwereconsolidatedwithothercompaniesastherailbubbleburstinthelateryearsofthedecade.

MuchoftherationalisationoftheUKrailnetworkwasdrivenby

oneman,GeorgeHudson,‘TheRailwayKing’,whoselegacy

helpedunderpintheexplosivegrowth(forbetterorworse)ofthe

Britisheconomyinthelatterhalfofthe19thcentury.ButHudson’s

successeswereenabledbythedevelopingeconomiclandscape,asfinancingmodelsmovedfromthetraditional‘insidercontrol’

modelofbusiness,controllingtheextractionandexploitationof

surplusthroughdirectauthorisation,totheindustrialcapitalists’

‘outsidecontrol’methodofjointstockcompaniesemploying

professionalmanagementtocrystalliseproductivesurplusesintheformoffinancialprofit(Bryer2025).ManyofHudson’spractices

exploitedthelaxregulationofthetime,andaccusationsthathe

hadimplementedanearlyproto-Ponzischeme,payingdividends

outofcapitalratherthanincome,lednotjusttohisownruinbuttothereformofcorporateoversightrules,astheconsequencesto

societyasawholeofmisbehaviourbycontrollinginterestsbecamemoresevere.

Thedevelopmentofthemoderncorporateformreflectedthe

concernsofsociety(oratleast,thosepartsofitabletoinfluencesuchmatters).Whileitiseasy,withthebenefitofhindsight,to

lookbackandseethewiderglobalimpactsofindustrialisation,facilitatedbythecorporateform,immediateconcernswerefarmorelocal.

Crucially,theearlyattemptstoaddresstheimpactofthesenew

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businessestargetedindividualundertakings,dealingwithindividual

incidentsastheyarose.Thelawofnuisancedevelopedrapidly,

andbytheendofthecenturysawthemillandfactoryowners’

freedomtopollutereinedintosomeextent.Buttheearlytonewassetbyacaseinvolvingthefirstcommercialsteamrailway.TheCourtheldthatstatutoryauthority(thepowerunderwhichthoseearly

companiesoperated)couldoverrideclaimsofnuisance;ortoputitanotherway,societyasawholehadtobearthecostsofprogress.

Corporateinterestsdidn’thavethingsalltheirownway.Manyvocalcriticstriedtorestricttheimpactofrapidlyexpandingeconomic

activity,citingarangeofdifferentconcerns.Thepublichealth

impactofthenewconcentrationofpeopleandactivityinthecitiesincludedeffectsonairandwaterquality.

Thecoalsmokefromfactorieswassodensethatsomepartsof

ManchesterandLondonhadtolightthestreetsatnoon.Buildingsturnedblackfromthesootwithinjustafewyearsofexposure,

whileawholeregionofEnglandbecameknownastheBlack

Country.Inunderacentury,thepepperedmothevolveddarker

wings,camouflagingitagainstsmoke-blackenedtreesand

stonework.Theimpactonhumanhealthwassevere,reducing

averageageatdeathforlower-classfactoryworkersinManchestertojust17years,halfthatofequivalentrurallabourers(BBCBitesize2026).

Meanwhile,theconcentrationofsomanypeopleincitieswhose

infrastructurehadchangedlittleinhundredsofyearschallengedsewagesystemsbeyondbreakingpoint.In1858thewatersof

theriverThamesbecamesofoulthatTheGreatStinkdrove

theMembersofParliamentfromthechamberoftheHouseof

Commons.Theycommissionedanewsystemofsewers,pumpingstationsandtreatmentworkstodealwiththeproblem.

‘…societyasawhole hadtobearthecostsofprogress.’

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‘Improvedsanitationwould

reducethenumberofpeople

seekingpoorrelief,somoney

spentonimprovingpublichealthwouldpayforitselfovertime.’

Buttheresponseofgovernmentwaslargelytobeartheburdenofrespondingtothesechangesitself.In1848thefirstPublicHealth

Acthadbeenpassed,legislatingforcleandrinkingwater,the

appointmentofamedicalofficerforeverytownandtheremovalofallrefusefromhousesandroads,aswellasimproveddrainageandtheprovisionofsewers–thoughthedrivingforcebehind

theAct,EdwinCh