Political turmoil in the UK may have the unexpected outcome of putting the importance of multi-stakeholder governance models back on the policy agenda
By Tom Powdrill, PDI Project Lead - Broadening Corporate Governance Participation
Prime Minister Keir Starmer announced his intention to stand down this week and is widely expected to be replaced by Andy Burnham, outgoing Mayor of Greater Manchester and newly elected member of parliament. As a result, the media and other interested parties are looking for clues to what policies a Burnham-led government might adopt.
Within the UK Labour Party, an important pro-Burnham faction is Mainstream. This week Mainstream issued a report entitled The Productive State: A Framework for Manchesterism. It puts forward a supply-side case for public corporations in energy, water, housing and transport. This mirrors Burnham’s advocacy of public control (rather than necessarily state ownership) of public infrastructure. Importantly, there is also a governance argument embedded in the proposed model, which will be useful for investors and others to consider.
The organisational form proposed is a public corporation, with an explicit public interest objective. We’ll return to what that might look like in practice at the end, but this would clearly be a different structure to, say, Thames Water, which has become the paradigmatic example of the failures of the UK’s current model.
The proposed governance structure for such public corporations seeks to address failings in the privatised infrastructure model, but, importantly, also those of the UK’s formerly state-owned companies. The paper identifies several institutional design failures under nationalisation: accountability ran upward to ministers rather than outward to the workers and communities the institutions served; operational independence was nominal and routinely undermined by ministerial direction; and democratic voice was weak, with no genuine worker or consumer participation in how services were run.
The paper’s analysis is repeated below.
Governance Architecture
Source: Lawrence & Williams, The Productive State: A Framework for Manchesterism (Mainstream, June 2026)
The alternative model proposed is built around important governance principles. First, arm’s-length operational independence: investment and operational decisions should be governed by professional boards with explicit public interest mandates, insulated from electoral cycles and ministerial interference. Second, there should be democratic accountability running outward rather than upward: this entails workers on boards, communities with substantive voice in planning processes and consumers with real rather than nominal power over service design.
The paper draws a distinction between operational independence (which it endorses) and insulation from democratic participation (which it rejects). Public corporations built on these principles, it argues, will be both better delivery vehicles for essential services and institutions through which workers, communities and consumers gain democratic power over material conditions affecting their lives.
The implication is that governance should itself be understood as productive infrastructure, rather than merely as an accountability mechanism. The proposed governance arrangements are not simply intended to constrain managers or improve oversight after decisions have been made. Rather, they are presented as part of the institutional architecture that enables public corporations to perform their functions effectively and legitimately.
It is worth being precise about the scope of the Mainstream proposals. The paper identifies water and sewerage, energy networks, and rail infrastructure as areas where the structural case for public ownership is strongest, alongside social housing and social care. For these sectors, it proposes national public corporations operating at arm’s length from government. The paper argues against treating the national public corporation as the only institutional form.
It’s important to note that in Manchester, Andy Burnham brought bus services under public control rather than public ownership. This model has enabled public authorities to have a direct role in determining service levels and fares whilst relying on the private sector to deliver the defined service. Thames Water may well return to public ownership, but Burnham might prefer an ownership model like that for Manchester buses elsewhere.
For those working in corporate governance and responsible investment, the agenda in the Mainstream paper raises some interesting questions worthy of reflection. The paper’s critique of experience of private infrastructure ownership, such as underinvestment and financial extraction via holding company structures, mirrors concerns that asset owners have sometimes raised about the behaviour of intermediaries. The argument that governance structure, not just ownership, determines outcomes has direct implications for how stewardship is exercised in these sectors, and for what investors should be asking of the companies they hold.
The paper treats worker participation in governance as part of institutional design rather than an afterthought. This aligns closely with PDI’s work on broadening participation in corporate governance. In the Mainstream paper workers on boards are seen as a foundational design feature, not an add-on. This sits within a broader international trend of mandatory or quasi-mandatory worker participation in governance that PDI is tracking across a number of jurisdictions. We’ll be saying more on this during 2026.
Corporate governance reform, at least in the form that investors most often see it, is typically treated as an accountability mechanism. But it is also a building block of predistribution. Decisions about investment, wages, employment, prices and long-term strategy are taken inside organisations, whether public or private. Governance determines who participates in those decisions and whose interests are recognised. Reforming governance therefore changes how economic outcomes are produced, rather than simply redistributing those outcomes after the event.
Whether proposals advance through public ownership or control, in the private sector, or both, the underlying institutional imperative is the same. How can we embed stakeholder voice in governance in ways that are substantive rather than tokenistic? The challenge is to ensure that organisations provide for stakeholder voice and recognise their interests alongside others.