Why Shareholders Don’t Want Shareholder Democracy

by John Carney for CNBC, March 17th, 2011.

Have you ever noticed how few public companies are run on anything like a democratic basis?

They have some of the trappings of democracy. Elections for directors; ballots on important—and sometimes unimportant—questions of corporate governance or strategy; investor meetings that sometimes resemble a New England townhall.

But, in practice, their democracy is a lot like the democracy in a one party state—you get the vote, but only party candidates and platforms stand any chance of winning.

To some advocates of good corporate governance, this is a scandal. It almost looks like there’s a bit of authoritarianism lurking at the heart of the free-market. If democratic capitalism is good enough to run our country, why isn’t it good enough to run our corporations?

In reality, however, corporate governance gives far more respect to individual liberty than any political democracy does. Unlike being a US citizen and a resident, it is quite easy to withdraw your membership from a corporation—simply sell your shares. No corporation can force you to accept its strategy or leadership. If you don’t like it, you don’t have to be a shareholder. (continue reading… )

0 Responses to “Why Shareholders Don’t Want Shareholder Democracy”



  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




Blog coordinator

Cefeidas Group

Archives

cgl-med-linked-in

cgl-med-linked-in
free counters

%d bloggers like this: