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that show signs of consumer dissatisfaction

over price, service levels or responsible

corporate behaviour. While President

Trump's agenda is pro-business and he is

expected to welcome inward investment,

there is also likely to be pressure on

transactions that lead to domestic job

losses. Deal narratives and regulatory

strategy will become increasingly

important to get acquisitions over the line.

Politicians are keen to demonstrate that

they are on the side of the ordinary citizen

and the 'nation' as a concept. May has

signalled she wants the ability to block

foreign investments in UK critical national

infrastructure, suggesting widening the

range of public interest factors in UK

merger reviews beyond national security,

media plurality and financial stability.

Foreign investment reviews have been a

growing trend globally for several years,

but before Brexit brought issues of national

identity to the surface there was little

discussion of UK deals in these terms.

The German government, too, intends

to expand its powers to veto foreign

acquisitions of technologies 'key to

the future of society'. To hear Deputy

Chancellor Sigmar Gabriel push for

blocking legislation at EU level and say

that German companies and German jobs

will not be 'sacrificed on the altar of free

markets' shows the government's desire to

protect domestic technology from Chinese

advances. If, in election year, Mr Gabriel's

words strike a chord with disaffected

workers in the Mittelstand, then all

the better.

or years the tax policies

of multinationals have

provoked a visceral

reaction among the 'left

behind' - the ability of big

business to shift profits to

more beneficial jurisdictions

has fuelled the notion that

the elite play by a different

set of rules.

A series of reforms - the OECD's base

erosion and profit shifting (BEPS) proposals,

which G20 signatories are in the process

of implementing, and the EU's Common

Consolidated Corporate Tax Base (CCCTB),

which is under discussion for 2021 - aim

to link the payment of tax to the countries

where profits are made. These are radical

projects. The former establishes the

requirement to report profits country-bycountry;

the latter is more controversial in

that it would introduce a uniform way for

governments to calculate taxable profits

and proposes pooling and distributing

group tax revenues to the states where

assets, employees and sales lie.

If you accept the logic that BEPS and

CCCTB are a response to society's call

for corporations to pay more tax, then

the debate in Europe has recently taken

a confusing intellectual shift. Theresa

May has repeatedly spoken of her desire

to create an economy that 'works for all'

and stressed in her 2017 Davos address

that everyone should pay their 'fair

share'. Yet just days earlier she raised

the prospect of turning the UK into a

tax haven should she fail to secure a

good Brexit deal. Her calculation appears

to be that voters will be more tolerant

of low corporate taxes if the alternative

is fewer jobs.

Driven by tougher regulation and more

intrusive investigations, fines for corporate

criminal offences have surged in the US

since 2008. For many this is evidence that

the system isn't working. While the picture

is more nuanced (many of the offences are

historic and therefore rising fines are not

necessarily evidence of falling behavioural

standards), it adds to the drumbeat of a

corporate class that's out of touch with

reality. In response authorities have been

equipped with new powers to impose

personal sanctions on business leaders -

new and boosted legislation in the UK, France

and New Zealand, for example, means senior

executives can now be charged for failing

to prevent certain economic crimes by their

staff. Whether more prosecutions follow

remains to be seen, but the fact populist

laws are being drafted by mainstream

leaders is a sign of the new world.


(Cited in The Economist)

Corporate criminal penalties

2001 2015


More than


in fines in 2015



At the same time

standards of

corporate conduct

appear to be

in decline…


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