The Quakers: A forgotten model of good governance

The twenty-first century has been witness to a number of corporate scandals and private-sector take-overs that have called into question the shareholder-focused economy and talk of a ‘post-capitalist’ economy. By way of contrast, this paper focuses on the Quakers as a (largely forgotten) exemplar of good organisation and good governance. We begin by briefly introducing the Quakers and the particular context (mid-seventeenth century England) from which they emerged. We then describe the significant impact that Quaker businesses had since the industrial revolution and we outline some of the business innovations they pioneered. In particular, the Quakers were known for their honest and honorable business practices, their enlightened approach to employee welfare, their concern for wider society, and their willingness to innovate. Today, most of these ‘Quaker’ businesses are no longer either owned or controlled by Quakers, and have almost invariably adopted the conventional shareholder model of corporate governance. We trace their demise to the introduction of limited liability and innovations in corporate law in the mid nineteenth century. These changes provided the legal basis for the Quaker family firms to incorporate, which many of them did in the late nineteenth century. We then describe how the unique Quaker ethos was inexorably decanted out of these companies during the twentieth century as the Quakers slowly lost both ownership and control of their businesses. We then inquire into how the Quaker story might help us reimagine the theory and practice of corporate governance and management.