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In discharging that sacred quest, a corporation’s agents could not have clearer instructions. Should return not pass muster, there are no excuses. There is no dog who can eat a chief executive’s homework, no looking on the bright side because employee engagement numbers are up, of the company had a popular float in the annual May Day parade. If the annual return disappoints, you get shot. | In discharging that sacred quest, a corporation’s agents could not have clearer instructions. Should return not pass muster, there are no excuses. There is no dog who can eat a chief executive’s homework, no looking on the bright side because employee engagement numbers are up, of the company had a popular float in the annual May Day parade. If the annual return disappoints, you get shot. | ||
===[[Stakeholder capitalism]] means never having to say you’re sorry=== | =====[[Stakeholder capitalism]] means never having to say you’re sorry===== | ||
All that clarity of purpose evaporates the moment you expand your list of stakeholders beyond that single class. Now a failure to generate a return can be blamed on your success in reducing the number of smokers in the accounts department, or your community outreach team spent all your excess cash on beautifying a local park, or you chose a buildings manager who was twice the going rate but had a better anti-modern slavery policy. | All that clarity of purpose evaporates the moment you expand your list of stakeholders beyond that single class. Now a failure to generate a return can be blamed on your success in reducing the number of smokers in the accounts department, or your community outreach team spent all your excess cash on beautifying a local park, or you chose a buildings manager who was twice the going rate but had a better anti-modern slavery policy. | ||
[[Stakeholder capitalism]] means the executive has an excuse. Always. For everything. | [[Stakeholder capitalism]] means the executive has an excuse. Always. For everything. | ||
===Customers can look after themselves=== | =====Customers can look after themselves===== | ||
== | Yes, customers are your stakeholders, and they have an interest how you conduct your business, but — at least in a healthy marketplace — they have a means of controlling that a lot more direct, regular and effective than do shareholders: they can buy something else. You can only maximise shareholder return ''by persuading lots of customers to buy your stuff''. | ||
{{sa}} | ===== Shareholders can’t easily look after themselves ===== | ||
Shareholders are a bit like voters in a representative democracy: their control over the enterprise is a lot less exacting that we like to think. One’s main weapon is the power of sale; beyond that, there’s the AGM, and unless you’re an institutional money manager, don’t expect anyone in the C suite to be massively bothered how you vote. | |||
=====Employees ''definitely'' can look after themselves===== | |||
Unlike shareholders, employees — especially those in the executive suite — have all the power they need to influence the company. | |||
=====If shareholders really want to beautify the inner city, they can do it themselves===== | |||
We assume shareholders are people with disposable income, and they have chosen to this sum into this company for the purpose of generating a return. If they wanted to donate to Oxfam, they could. It is not the company to second guess the moral priorities of its shareholding. As mentioned above, in all respect but the single one of the aspiration for a maximum return, the shareholders interests are entirely opaque, and certainly conflicting. There will be democrats and republicans, vegans and carnivores, wets and dries on the share register. The executive cannot pander to these conflicting proclivities.{{sa}} | |||
*[[Stakeholder]] | *[[Stakeholder]] | ||
*[[Equities]] | *[[Equities]] | ||