“The large, publicly owned corporation is, nominally, a representative democracy. But power in most corporations lies everywhere but in the hands of the people. For decades, the shareholders of big U.S. companies have resembled the pre-Revolutionary American colonists, who labored under an indifferent ruling class that looted the people’s wealth and that left them few lawful means of redress. Today, citizen shareholders vote for referenda that company leaders ignore; they are represented by people whom they have no say in choosing.
Unhappy shareholders, like the colonists, have two choices. One is to simply invest their money somewhere else – the shareholder equivalent of going into exile. The other is to rebel in the hope of taking control. Few shareholders in the past have had the stomach for such a fight. But open a window on Wall Street today, and you can smell gunpowder in the air.”
Editor’s Note: see related interview Lynn Stout, proponent of the “team production” model of corporate governance, which stands in contrast to the shareholder-primacy model.
James Krohe Jr.
Source: Across the Board (ATB)
Subjects: Corporate Governance, Social Responsibility (ESG)
