From shareholder value to private equity – the changing face of financialisation of the economy

Across the OECD, a process of financialisation of the economy can be observed. Defined as the increasing dominance of the finance industry over the real economy and workers, financialisation can take different forms, including: growing instability and opacity of financial markets, increasing focus on shareholder value and the rise of alternative investors. This article reviews in particular the challenges to trade unions posed by the rise of the shareholder value model of governance in listed companies – as seen during the review of the OECD Corporate Governance Principles in 2004 – and more recently the boom in private equity buyout transactions. The trade union response to financialisation has followed two tracks: (i) to engage in regulatory advocacy at national and international levels for stakeholder approaches to corporate governance and financial markets and (ii) to mobilise workers' capital managed by pension funds to ensure responsible and long-term investor behaviour.