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August 9, 2002
Ansar Ahmed
The Waning
of the
Pax Americana
Alexander Cockburn
War,
the Military and the Hunt for the "Violence Gene"
August 8, 2002
Ron Jacobs
Iraq:
The Final Storm?
Dave Marsh
Now Ain't
the Time
for Your Tears
Mark Weisbrot
Bush
Administration Tries to Hide Role in Venezuela Coup
Anthony Gancarski
AIPAC,
Congress and Iraq
Robert Fisk
Families
of the Disappeared Demand Answers
Gary Leupp
Karzai's
Bodyguard
August 7, 2002
Anis Shivani
The First
21st Century
Police State
Jeffrey St. Clair
Fallon's
Fallen
Is the US Navy Killing
Children in Nevada?
Robert Fisk
For the
Forgotten Afghans,
the UN Offers a Fresh Hell
Dr. Susan Block
Rigas in
Cuffs
Bill Christison
Disastrous
Foreign Policies of the US Part 5: the Call of Democracy?
August 6, 2002
Philip Farruggio
Signs
of the Elites
Bruce Gagnon
We Must
Come Alive
David Krieger
From
Hiroshima to Hope
Jerre Skog
Global
Reach of Corporate Crime or What the Hell are
They Teaching at Harvard?
Robert Fisk
Return to
Afghanistan:
Collateral Damage
Alexander Cockburn
The
Fox in the Pension Fund
August 5, 2002
Rahul Mahajan
Iraq
and the New Great Game
Jordy Cummings
The
Last Frontier of
Israel and Palestine
Bernard Weiner
Inside
Saddam's Diary
Mike Leon
US Mute
to Israeli Brutality
Norman Madarasz
Brazil:
the Most Important Election of 2002?
August 4, 2002
Susan Davis
Fat Americans
August 3, 2002
David Krieger
Nuclear
Apartheid
Gilad Atzmon
The End
of Innocence
Gavin Keeney
Everybody's
a Critic
Alexander Cockburn
Can the Times' Jeff Gerth
Save Dick Cheney?
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Text by Daniel Wolff
The New Intifada:
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Edited by Roane Carey
A Pocket Guide to
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August
9, 2002
Corporate
Crime
Shareholder
Power Not the Answer
by Russell Mokhiber
and Robert Weissman
If nothing else, the still-unfolding corporate
scandals should free us to think freely and creatively about
corporate power, corporate form and the rules governing corporate
behavior.
A common diagnosis of the current scandals
is that they can be traced to company executives' ability to
function with little accountability to shareholders.
An alternative view is that the problem
was that executives were thinking too much about what shareholders
want. Of  course, shareholders did not
want CEOs to steal from their companies and arrange bogus loans
to themselves. But the more serious accounting crimes -- projecting
inflated profits and revenue streams -- were arguably a result
of what shareholders did want: short-term profits and other indicators
that raise share prices, especially in the short term.
Marjorie Kelly is an adherent to this
second interpretation. Kelly is the author of The
Divine Right of Capital: Dethroning the Corporate Aristocracy,
and editor of Business Ethics magazine.
Starting in the late 1980s, she points
out, "shareholders got precisely what they wanted. The Enron
and attendant scandals hold some interesting lessons. We think
of this as a situation where shareholders got harmed, but forget
that leading up to it, shareholders got precisely what they wanted.
The financial elite got complete alignment between CEOs and shareholders
through stock options, they got the removal of a regulatory regime
to a large extent, and they got a rising stock market -- all
the things that they wanted -- and yet it imploded."
"People are saying we need to align
executives closer to shareholders," she says. "I believe
their alignment was too close. We need a corporation that is
accountable to someone besides shareholders."
Moreover, Kelly says, shareholders do
not deserve to exert control of the corporation. Shareholders
contribute very little to the company. But for initial public
offerings (IPOs) and other sales of new company stock, none of
the back-and-forth trading on the stock exchanges contributes
new money to the company. Indeed, Kelly notes, in 15 of the last
20 years, corporations have spent more on stock buybacks than
shareholders have invested in new equity.
For the one-time contribution to corporations
at their founding, or at the placement of shares on the market,
shareholders gain perpetual absolute control of the corporation.
Recognizing the minimal contribution
of shareholders, says Kelly, leads away from questions about
enhancing shareholder power, and instead to, "Is any amount
of return ever enough for a one-time hit of money? Or must a
company have as its single-minded purpose, forever, that it will
move heaven and earth to create return for that one-time gamble?"
Kelly suggests a range of alternatives
to the entrenchment of shareholder power and privilege.
One of her most provocative suggestions
is time-limited shareholding.
One approach would be to dilute shareholder
control progressively over time. Residual control could be lodged
in employees, or a public entity. Or the for-profit corporation
could morph over time into a non-profit enterprise -- a reversal
of the current trend to convert not-for-profit and mutual insurance
companies (such as Blue Cross) to for-profit status.
All of this is far from immediate enactment,
of course.
But it is nonetheless worth assessing
as a conceptual tool, and perhaps as a long-term project, to
move business enterprises out of the shareholder-dominated and
for-profit paradigms, to a place where new values may govern
their operations.
One place where such conversions might
be contemplated first is at the point of least shareholder power,
in bankruptcy -- a place where more and more corporations are
sure to find themselves in the months ahead.
Russell Mokhiber
is editor of the Washington, D.C.-based Corporate Crime Reporter.
Robert Weissman is editor of the Washington, D.C.-based
Multinational
Monitor, and co-director of Essential Action. They are
co-authors of Corporate
Predators: The Hunt for MegaProfits and the Attack on Democracy
(Monroe, Maine: Common Courage Press, 1999.
Today's Features
Ansar Ahmed
The Waning
of the
Pax Americana
Alexander Cockburn
War,
the Military and the Hunt for the "Violence Gene"
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