Prevailing patterns of dispersed share ownership and rules of corporate governance for UK listed companies appear to constrain the ability of managers to make credible, long-term commitments to employees of the kind needed to foster effective labourmanagement partnerships. We present case study evidence which suggests that such partnerships can nevertheless emerge where product market conditions and the regulatory environment favour a stakeholder orientation. Proactive and mature partnerships

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... y also be sustained where the board takes a strategic approach to mediating between the claims of different stakeholder groups, institutional investors are prepared to take a long-term view of their holdings, and strong and independent trade unions are in a position to facilitate organisational change. JEL codes: G34, J53, K22, K23. make credible commitments to their employees. However, ownership is not decisive on its own. Regulatory factors, in particular relating to product markets, are also important, as is the strategic role of the boards of particular companies in shaping their approach to corporate governance. We review cases of companies which have developed enduring labour-management partnerships while continuing to be active in the market for corporate control and maintaining a wide share ownership base. We suggest that where the corporate governance system can be seen to support partnership in this way, it operates in conjunction with regulation underpinning quality standards, relative stability in product markets, and, above all, a willingness on the part of senior management to mediate between the claims of different stakeholder groups, rather than seeing themselves simply as agents of the shareholders.