Future Governance Options for the Mars Corporation

Michie, Jonathan and Roll, Kate (2017) Future Governance Options for the Mars Corporation. Saïd Business School Working Paper 2017-10.

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Abstract

This paper argues that ownership forms and governance arrangements will play a critical role in ensuring the future of mutual practices and outcomes for the Mars Corporation. Mutuality is one of the company’s five core principles, and members of Mars Incorporated have increasingly been exploring how mutuality can be harnessed and embedded, thereby producing positive outcomes for both the corporation and its stakeholders. This paper looks specifically at how ownership structures can contribute to the mutuality of the corporation.

There are plenty of member-owned ‘mutual’ businesses that fail to develop and implement the necessary policies and practices to take full advantage of their mutuality for business purposes: it is an opportunity lost. Conversely, there are non-mutuals, in the sense of organisations that are not member-owned, but which pursue mutuality as a business principle. These companies gain some advantage from so doing, but perhaps not to the full extent that would be possible were those principles to be supported by a degree of actual mutual ownership, and with less chance of that mutuality being sustainable. Companies that do not reward their employees or customers with any actual ownership stakes may nonetheless seek to engender a ‘sense of ownership’ amongst them: this may pay dividends, but it is likely to be more effective and sustainable if underpinned by a degree of actual ownership.

This paper argues firstly, that to get the most out of mutuality, and to make is sustainable, requires a degree of mutual ownership. Using ‘trust’ or ‘foundation’ structures has proved successful at delivering such outcomes in a range of companies across the leading industrialised economies.

Looking forward, to the question of how Mars Incorporated may choose to structure its own ownership and governance arrangements in the future, the company is involved in a range of interesting activities globally that might usefully seek to develop forms of mutuality with their suppliers and other ‘stakeholders’ in their distributional value chain. In so doing, Mars would be promoting mutual ownership within other, new companies. This would have three beneficial effects. First, it would strengthen the sustainability of those ventures themselves. Second, it would contribute positively to the degree of corporate diversity and resilience within those economies. And third, it would contribute in imaginative and innovative ways to the growth and development of the mutual sector itself, globally and over time.

Item Type: Oxford Saïd Research Paper
Subject(s): Management science
Date Deposited: 07 Jul 2017 11:13
Last Modified: 07 Aug 2017 13:18
Funders: N/A
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6437

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