There is another victim of the credit crunch: the publicly traded model of ownership. The near-collapse of many of the large banks in perhaps a dozen countries shows that such corporate structures do not work.

I have served on the boards of various public companies for more than 20 years and most such constructs were dysfunctional. Interests were not aligned and there was more focus on pointless, ritual corporate activity than underlying profitability and productivity. Everyone tries hard, but the disconnect between management and ultimate ownership leads to the profound issues our economy now faces.

Large public companies are mostly owned by a hugely fragmented shareholder base. Most of us have pension and insurance policies, through which we all invest in equities; everyone owns them and yet no one does. No owner has control, so the hired hands rule the roost. Fund managers meet executive directors twice a year for an hour and expect to understand what is going on. Too often they judge management based on their ability to carry off a presentation rather than their true skills as leaders. Professional investors have stakes in 100 companies or more and expect to have real insight into all of them: a fantasy. Meanwhile, the top directors of a large public company can spend a fifth of their time visiting hundreds of actual or would-be shareholders.

If things fall apart at a company, asset managers cling to a naive faith in the non-executives, as if they are really able to change matters. But on most occasions institutional investors find it easier to run from the battlefield by selling their shares. So who has any incentive to fix the cock-ups?

After all, how can the non-execs really understand what goes on? They meet less than once a month for a few hours. These days they are appointed more on politically correct criteria than anything else. Mostly, they are paid to conform. No one dares challenge the executive directors because the executives have all the information.

Under corporate governance guidelines, non-executives are not meant to have material shareholdings. Why on earth anyone of calibre bothers to go on a large public company board is a bit of a mystery. Can it only be vanity or boredom? No wonder the headhunters come up with the same tired list of names, most of whom are already chums.

On stock markets the mad gyrations of a share price during a few days can determine the destiny of an institution that has been going for 200 years. If their shares had not imploded, would the government have stepped in to save RBS and the others?

I always thought it was a terrible sign when a chief executive had a screen in the office showing the company share price - but perhaps they were the clever ones. How can anyone run a business when hedge funds trade big chunks of their equity every day? Because hedge funds comprise up to 50 per cent of all broking commission and a fair portion of trading volumes, even though they only hold 2 per cent of all shares, they have a hugely disproportionate effect on market behaviour. One benefit of these troublesome times is that hedge funds are likely to be much less influential in future, since their resources will be greatly diminished.

I believe private ownership allows a more stable, long-term approach to wealth creation. Highly geared leveraged buy-outs may suffer in the coming downturn, but family or employee ownership offers advantages over the volatility of quoted companies. There is less minute-by-minute exposure to external scrutiny, and less obsession with immediate valuation. Organising such ownership structures for banks would not be easy, but it might lead to a healthy state of affairs.

Last week I spoke at the launch of Tomorrow's Owners, a report prepared by the think-tank Tomorrow's Company to investigate the future of corporate stewardship. While I don't agree with all its contents, the study is a worthwhile exploration of how businesses are owned. Anyone who wants to understand the issues and help provide solutions should get hold of a copy and contribute to the debate.

www.tomorrowscompany.com

lukej@riskcapitalpartners.co.ukThe writer is chairman of Channel 4 and runs Risk Capital Partners, a private equity firm