Reforming capital markets to build broad-based prosperity and reduce economic inequality

As employee ownership gains traction across the political spectrum, Tom Powdrill draws on a groundbreaking Spanish initiative to argue that ownership alone isn't enough. Examining the report from Spain's International High-level Expert Committee on Democracy at Work, convened to activate a long-dormant constitutional provision, Tom highlights its two-pillar framework distinguishing ownership (participation in wealth creation) from voice (participation in governance decisions). The Committee's ambitious proposals include minimum equity thresholds of 2–10% for companies based on size, alongside citizen-controlled investment funds that diversify worker wealth beyond a single employer. Tom argues this distinction, that equity participation is not a substitute for collective bargaining or genuine governance participation, should inform how companies, investors, and policymakers everywhere approach broadening economic participation.

In this paper, the Predistribution Initiative (PDI) explores how economic inequality is a macro-financial risk to markets and diversified portfolios. It explains how inequality manifests across people, firms, regions, and capital value chains and traces structural drivers—including financialization, deregulation, monetary policy, market concentration, and traditional corporate governance structures.  Proposals are made for predistributive solutions such as living wages, freedom of association and collective bargaining, grievance mechanisms, employee and community ownership models, and corporate governance reform that better aligns the incentives of investors, investees, and their stakeholders.

In his latest post, PDI Project Lead on Broadening Corporate Governance Participation, Tom Powdrill zeroes in on a timely report from Mainstream — a pro-Burnham Labour faction — titled The Productive State: A Framework for Manchesterism. The report makes a supply-side case for public corporations in energy, water, housing, and transport, but what makes it especially relevant to PDI's work is the governance model it proposes: arm's-length operational independence, workers on boards as a foundational design feature, and democratic accountability running outward to workers and communities rather than upward to ministers. As Tom puts it, corporate governance reform is not merely an accountability mechanism, it is a building block of predistribution.