An interwoven financialization narrative as a driver of the 2008 Crash

What is it about?

The 2008 Crash has been attributed to the dominance of financialized corporate governance, particularly an increased shareholder value rhetoric. Following the Crash, this extreme narrative is understood to have become less financialized through increasingly favouring stakeholders. This often-accepted view, however, is investigated using field theory, wherein managers’ biases in the value-creating process result from an interconnected, dynamic, multi-actor discourse. Various domains across the UK’s corporate governance environment, from the perspective of field theory, generate the complex discourse: corporate and regulatory domains, stakeholder organizations such as the press and thinktanks. Domain-specific corpora, representative of this multi-actor field, were constructed; with financialization analysed by assessing managers’ altering biases concerning the relative importance of shareholders and stakeholders (amongst other factors like time horizon) to value creation. Highlights of the multiple findings include: corporate narrative about value creation became less financialized following the Crash yet favouring shareholders; while the multi-actor discourse for the UK economy as a whole became slightly more financialized. Analyzing a multi-actor discourse is complex. And this is the first study of its kind, only made possible with the original methodology of narrative staining. The approach, while having particular relevance to field theory, is applicable to many other narrative-based research scenarios.

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