In Conversation with Thomas Clarke

In Conversation with Thomas Clarke

In our highly-anticipated 8th episode of “In Conversation with Sage Authors,” we are privileged to host the esteemed Thomas Clarke, the author of the groundbreaking new book “Corporate Governance: Cycles of Innovation, Crisis, and Reform“.

Get ready for an engaging journey that not only delves into Thomas’s illustrious background but also uncovers the profound motivation behind his creation of this essential textbook, tailored specifically for students enrolled in Corporate Governance modules/courses.

Join us as we explore what distinguishes his new book from the existing body of literature on Corporate Governance, and how it promises to revolutionize the way students and practitioners perceive and navigate this critical field.

This is your chance to gain unique insights and expertise directly from the author himself. Without further ado, let’s dive in!


I am a Life Fellow of the Royal Society of Arts (RSA) and an international expert in corporate governance, innovation, and sustainability. Formerly I was editor for governance and sustainability of the Journal of Business Ethics, a FTSE 50 journal. I edited the Sage Handbook of Corporate Governance and also edited the Oxford Handbook of the Corporation. Covering the entire field I edited two extensive book series for Sage: Fundamentals of Corporate Governance, and Corporate Governance and Globalisation.

My present research interests include climate change and the pivot towards corporate sustainability including integrating targets and measures, progress towards decarbonization, and regeneration of the natural economy.

I was a foundation Professor at the China Europe International Business School (CEIBS), a joint venture of the European Union and Shanghai Government, and Director of the key university research Centre for Corporate Governance at UTS Sydney, Australia.  I have held Visiting Professorships in four continents including the University of Paris, University of Geneva, FGV Business School, Sao Paulo, Brazil, and UNAM and UAM Business Schools in Mexico.

Inspiration Corporate Governance: Cycles of Innovation, Crisis and Reform (Sage 2023)

I suppose the inspiration for writing Corporate Governance: Cycles of Innovation, Crisis and Reform lay deep in my subconscious in experiencing a series of economic and business crises early in my adult life. I was brought up in the industrial heartland of the North of England. The great textile mills and factories that had delivered the industrial revolution were mostly now derelict with the labour-intensive work moved to developing economies.

What remained was the pride of the UK engineering and manufacturing industry – companies such as English Electric and Triumph which were world leaders. As I entered university I watched in disbelief as factory after factory, company after company closed its doors in the wholesale deindustrialization of Britain. I could not understand what was happening until Lord Stokes the Chairman of British Leyland, (which had restructured the remnants of the UK car and truck industry), said in 1970 that the financiers of London valued the entire British Leyland conglomerate employing tens of thousands of people at less than the value of one City office block.

As an undergraduate at this time, I had come across Paul Blumberg’s book Industrial Democracy which seemed to offer a brighter, more balanced and inclusive industrial future, in which working people had a say, trade unions were respected, and company management and directors are aware of their wider responsibilities to their company, the economy and society. I registered for doctoral research on Industrial Democracy at Warwick University, and much sooner than I might have imagined my ideas were put to the test.

At this time at three companies (Fisher Bendix, Triumph Meriden and the Scottish Daily News) the workers had resisted closure notices by occupying their factories and calling for government intervention. I received a call asking me to come up to the Fisher Bendix factory in Liverpool and study the factory occupation. I brought a large reel-to-reel tape recorder and began interviews in an office at the factory. I asked a worker from the shop floor, Ralph Peacock, my first question “How did this happen?” He took two and a half hours to reply to the single question, only stopping for breath when the large reel had run out. Fortunately, both the UK Secretary of State for Industry Tony Benn, and the Prime Minister Harold Wilson at the time were sympathetic to the workers’ plight and rather than fund the private company, Tony Benn proposed they establish a workers co-operative.

My resulting study was published in pamphlet form, and the playwright Chris Bond included much of the workers dialogue from this in a play Under New Management at the Liverpool Everyman Theatre in 1975 (that starred future Oscar nominees Bill Nighy, Julie Walters and Pete Postlethwaite in a raucous musical comedy).

I was awarded a Social Science Research Council grant to study all three co-operatives and found myself in Glasgow studying the Scottish Daily News, which became the story of how the reckless billionaire Robert Maxwell took over and ruined a workers’ cooperative. (My ensuing Report to the SSRC came back with many blue lines through it, and the statement “You cannot say this about a respectable leading British businessman.” Subsequently, a government inquiry into Robert Maxwell’s role in the company Pergamon Press was far more damning and stated that he should not be allowed to be a director of a publicly quoted company. Maxwell went on to become the proprietor of the Mirror Group of newspapers, and finally in 1991 stole £600 million from the Mirror pension fund to service his billions of indebtedness. Then he jumped off his yacht the Lady Ghislane into the Atlantic Ocean. Dead men cannot sue, so suddenly I could publish the material I had written 15 years before about Maxwell’s misdeeds. This story made the front page of the New Statesman.

Astonishingly to me I was offered the funded Professorship of Corporate Governance at Leeds Business School two months later, and I was immediately thrust into the national debate about corporate governance resulting in the Cadbury Report. Sir Adrian Cadbury proved a dedicated mentor to me and many other academics and business leaders. Meanwhile, I became a member of the task force of the Royal Society of Arts Tomorrow’s Company Inquiry, and subsequently published the book Rethinking the Company.

I really thought that within five years in a spirit of reform, we would resolve many of the governance and institutional problems that afflicted business internationally. This proved unfounded. Invited in 1997 with a small group of corporate governance experts by the President of Malaysia to celebrate the Centennial of the first incorporated company in the country, as we touched down the Asian Financial Crisis broke. Not myself, but other experts present suggested Malaysia had simply to accept Western standards of corporate governance, and everything would be fine.

Of course, within two years this illusion was shattered with the US dot com bubble leading to the spectacular Nasdaq crash of 2000. This was quickly followed by the momentous crashes of Enron and WorldCom in 2001/2002, regarded at the time as among the leading companies in America. The stringent Sarbanes Oxley Act 2002 was introduced to discipline companies, but the ineffectiveness of this was later demonstrated in the scale of the Global Financial Crisis of 2008 commencing with the failure of Lehman Brothers in New York with the loss of $33 trillion from global exchanges.

It would be comforting to suggest we have learned from the crises in the past and contemplate a more stable future. But in fact, we now are faced with climate change, the greatest crisis mankind has ever confronted. The climate change crisis does not simply threaten industry and the economy, it imperils the world.

What sets this textbook apart from others in the same field?

In a lifetime of researching corporate governance internationally, I have been struck by three apparently irresistible forces:

  1. The constant drive for innovation in industry – in technology, business models, strategies, and finance
  2. The recurrent tendency for this innovation to be transformative to the point where this innovation destabilises business and systemic crises occur
  3. Governments and regulators then intervene with dramatic reforms.

Corporate governance innovation, crisis and reform are essentially cyclical. Reflecting the mood of the wider economy, during long periods of innovation, expansion, and apparent economic success, active interest in governance diminishes. Companies and shareholders are more concerned with the generation of wealth, rather than in:

  • ensuring governance mechanisms are working appropriately to ensure that wealth is generated responsibly,
  • mechanisms are in place for the retention of wealth with integrity, and that wealth is used for agreed purposes, and
  •  paying attention to the impact of economic activity on the society and environment, that are marginalised as externalities.

During waves of innovation the sense of creative destruction reigns, everything is possible, almost anything is permissible, because there is really serious money to be made if imagination and enterprise are unleashed. Presently the Asia Pacific is gripped in a giant wave of technological transformation as I outline in my work with Professor Keun Lee, former President of the International Schumpetarian Society, Innovation in the Asia Pacific – From Manufacturing to the Knowledge Economy.

Waves of corporate governance reform and increased regulation occur during the following periods of recession, corporate collapse, and the sudden recognition of the costs and dangers of social and environmental damage. This realisation leads to a hasty re-examination of the viability of regulatory systems with a renewed focus on the vital importance of high standards of corporate governance, integrity and social and environmental responsibility.

These cyclical trends were studied intently by Adam Smith, Karl Marx and other political economists during the rise of industrialism. In the early twentieth century the economists Kondratieff and Schumpeter focused upon the ‘waves of creative destruction’ they perceived were being unleashed by industrial capitalism.

However, in the contemporary academic world, the study of innovation, financial crisis, and regulatory reform tend to be compartmentalized by separate disciplines. In contrast Corporate Governance: Cycles of Innovation, Crisis and Reform attempts to reveal the interconnections that cause recurrent crises internationally.

The focus of most textbooks on corporate governance is on the institutions and mechanisms of business in the Anglo-American world. Whether explicit or implicit the assumption is that while there may be a degree of historical institutional diversity in governance institutions, the forces for global integration are such that a universal model of corporate governance largely shaped by the forces of Anglo-American international financial institutions and regulatory architecture will prevail. The emphasis on shareholder primacy and the principal/agent problem remains dominant (even in the research on Asian modes of corporate governance where clearly principal/principal problems are most apparent).

In mainstream corporate governance literature, there is little mention of the forces of innovation – technological, institutional, or political. The sense of the transformatory powers of technological revolution or regulatory intervention is rarely conveyed as a central dynamic of the system. In particular, the huge impact of the financialization of the industrial economy is often neglected in mainstream governance analysis. In sum, the rich diversity of corporate governance forms is often neglected, and the dramatic transformations occurring in finance and business largely ignored.

Corporate Governance: Cycles of Innovation, Crisis and Reform in contrast attempts to convey the dynamic forces transforming governance focusing upon the impact of climate change and the search for sustainable value creation.

Crafting the distinctiveness of this book

There is an abundance of books on mainstream corporate governance, but they often appear very similar in form and substance. The standard works do have focus and authority, which is helpful to students and practitioners who are intent on securing a knowledge of the basic institutions, policies, and procedures of corporate governance. However, this narrow focus does not provide insights into the technological and financial transformation of business including the governance institutions and practices.

By focusing on the cycles of financial bubbles and crises, the systemic failure of governance institutions, the digital disruption of markets and companies, and the overwhelming impact of climate change and the urgent need for sustainability Corporate Governance: Cycles of Innovation, Crisis and Reform certainly sets itself apart from the extant literature.

Impact of this new book

Corporate Governance: Cycles of Innovation, Crisis and Reform is the result of decades of research and teaching across the continents. Students have invariably responded with great enthusiasm to the challenge of examining dynamic corporate governance and have produced countless incisive case analyses of corporate governance success and failure inspired by technological transformation. Equally, students have risen to the challenge of investigating the causes of systemic financial crises, and the impact upon corporations and communities. Finally, students have reflected well on the need for proactive regulatory intervention to restrain irresponsible financial or corporate practices.


Paul Blumberg (1973) Industrial Democracy, Knopf Doubleday Publishing,

Thomas Clarke and Elaine Monkhouse (1995) Rethinking the Company, Financial Times

Thomas Clarke and Marie dela Rama (2006) Corporate Governance and Globalisation, Sage

            Volume 1         Ownership and Control

            Volume 2         Development and Regulation

            Volume 3         Convergence and Diversity

Thomas Clarke and Marie dela Rama (2008) Fundamentals of Corporate Governance, Sage

            Volume 1         Ownership and Control

            Volume 2         Boards and Directors

            Volume 3         Executives and Performance

            Volume 4         Stakeholders and Sustainability

Thomas Clarke and Douglas Branson (2012) Sage Handbook of Corporate Governance, Sage

Thomas Clarke and Keun Lee (2018) Innovation in the Asia Pacific – From Manufacturing to the Knowledge Economy, Springer

Thomas Clarke, Justin O’Brien and Charles O’Kelley, (2019) Oxford Handbook of the Corporation, OUP

Like what you read? Don’t forget to explore our other Sage Authors’ Interview articles:

In Conversation with Virginia Braun and Victoria Clarke

In Conversation with Stewart Clegg

In Conversation with Claire Cartwright

In Conversation with Mary Ellen Gordon

In Conversation with Al Marshall

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