Work in progress
Julian Franks is a Professor of Finance at London Business School and Academic Director of the Centre for Corporate Governance and lead investigator for a £1.4 million grant for research into corporate governance. We asked him for an update on his work in progress.
There is nothing which pleases the true academic more than the question, what are you working on at the moment? The true enthusiasts, such as Julian Franks, pause momentarily for breath and then launch into their driving passions of the moment.
Professor of Finance at London Business School where he has been based since 1972, Julian Franks’ current research is characteristically eclectic. With a variety of academic colleagues, he is examining family businesses in France, Germany, Italy and the UK. This research is looking for an explanation why the UK has a low proportion of family businesses compared with France, Italy and Germany. He is also examining European shareholder activism, as well as doing a paper on ownership in Japan which asks why it is so different from ownership in the UK and elsewhere.
“I’m really interested in ownership in capital markets and why ownership has evolved so differently across countries. Why have capital markets been successful in some countries, and not successful in others?” says Franks. “My research over the last 20 years has studied capital markets in Germany, Japan and France, as well as the United States and UK. We are a global business school, and we have quite rightly moved away from the idea that the centre of the universe should be the Anglo-American capital markets or Anglo-American capitalism, we have moved away from that. We can’t have any one capital market being our anchor; we have to have a much broader view.”
Julian Franks brings a pragmatic outlook to these subjects. “You move onto a particular branch of the tree, you evolve and you can’t often retrace your steps. We are where we are, and you only find out later if you got onto the right branch or not. We have had very successful stock markets and capital markets for the last 100 years, but there is no God-given right that we’ll continue to be successful. I think it’s a very interesting issue to address. Will we remain dominant, and can we do anything about it if we’re not going to be dominant, if we somehow got onto the wrong branch?”
There is a whiff of pessimism to this final comment. It is out of character. “I try not to be pessimistic about anything”, says Julian Franks. “But I am worried about the future of UK capital markets. I think we should worry, and I think the politicians should worry about this.”