82,890
edits
Shareholder: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary Tags: Mobile edit Mobile web edit |
||
| Line 5: | Line 5: | ||
{{quote|“...Though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements...They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species”}} | {{quote|“...Though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements...They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species”}} | ||
Performance measurement was simple: the shareholders’ interest propelled the machine and | Performance measurement was simple: the shareholders’ collective interest propelled and motivated the machine in all its manifold intricacy. | ||
Every impulse, ever decision, every project, every transaction could be gauged and evaluated against a single dimension: is this in the shareholders’ best financial interest? | |||
That interest could be measured in a single dimension: cash profit. Nothing else mattered, and this even put a gate on the extent to which the company’s directors, officers, servants and agents could let their [[agency problem|conflicting personal interests]] colour their pursuit of this noble, singular goal. You cannot hide from after-tax profit. | |||
But we live in a post-millennial world. Corporations are venal, selfish things, riven with bias, discrimination; a product of the West’s colonial history of oppression and wanton marginalisation. [[Adam Smith]], though a vigorous opponent of slavery, back in 1763, is in danger of being cancelled.<ref>https://www.nationalreview.com/2021/03/cancel-culture-stalks-adam-smith-an-ardent-foe-of-slavery/</ref> | But we live in a post-millennial world. Corporations are venal, selfish things, riven with bias, discrimination; a product of the West’s colonial history of oppression and wanton marginalisation. [[Adam Smith]], though a vigorous opponent of slavery, back in 1763, is in danger of being cancelled.<ref>https://www.nationalreview.com/2021/03/cancel-culture-stalks-adam-smith-an-ardent-foe-of-slavery/</ref> | ||
| Line 17: | Line 20: | ||
You might not be surprised to find your correspondent taking a contrarian view. This not an “a[[woke]]ning” so much as ''a kind of national concussion occasioned by a stout blow on the head''. For stakeholder capitalism is to ''codify'' the [[agency problem]]; to beautifully diffuse accountability for anything the corporation does. | You might not be surprised to find your correspondent taking a contrarian view. This not an “a[[woke]]ning” so much as ''a kind of national concussion occasioned by a stout blow on the head''. For stakeholder capitalism is to ''codify'' the [[agency problem]]; to beautifully diffuse accountability for anything the corporation does. | ||
Shareholders, as a class, are, in theory, infinitely diverse in every conceivable dimension bar one. They don’t know each other, | Shareholders, as a class, are, in theory, infinitely [[diverse]] in every conceivable dimension bar one. They don’t have to know each other, like each other or care less about each other. They can be young or old, rich or poor, left or right, tall or short, male or female, gay or straight, black or white, or in each of these categories, any gradation in between. In all other walks of life bar this one their respective interests, aspirations and expectations might jar, clatter and undermine each other. If you put them in a room you might not be surprised if a fight broke out. | ||
The class of a company’s shareholders need have — no, no: ''will'' have — nothing whatever in common ''beyond their shareholding''. | |||
But in that one interest, they are utterly aligned: whatever else I care about in my life, members of the board, know this. ''I expect you to maximise my return''. | But in that one interest, they are utterly aligned: whatever else I care about in my life, members of the board, know this. ''I expect you to maximise my return''. | ||
And nor is there dispute about what counts as return, or how you measure it. Long ago our ancestors figured out a means of articulating pure, abstract immaterial value, divorced from any relativising commodity or perishable substrate:<ref>Granted, it is imperfect: until recently much cash did have a substrate (paper send coins), and its value is still coloured by the credit consensus of its issuing bank, which can control its supply and demand, but the substrate issues are largely resolved, and consensus in the bona fides of the [[Federal Reserve]], [[ECB]] and [[Bank of England]] has proven a lot more robust then that of crypto currencies. Don’t @ me, [[bitcoin]] maximalists.</ref> [[cash]]. | |||
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. | ||