The takeover of Royal Mail: lessons for the new owners from past corporate governance and trust failures

As the takeover of Royal Mail proceeds, this article looks at the company’s recent history to show how corporate governance and industrial relations ought not to be practised, especially during times of change and transition, such as in Royal Mail, where privatisation, market liberalisation and a takeover have occurred in little more than a decade. The argument presented is that lack of workplace trust, such as has been evident in Royal Mail, threatens a company’s overall performance and prospects. On the other hand, where trust is high, organisations enjoy higher financial performance and labour productivity as well as better product or service quality. Indeed, workplace trust is correlated with lower turnover, higher employee engagement, and customer and employee satisfaction. We argue also that, post-privatisation, corporate governance plays a key role in shaping the corporate culture, either to build or to undermine trust.