I disagree! Some companies can very well be run at a high rate of indebtness (leverage), given that its earning stream is very stable, and the owners are well capitalised (so they can step up in case of a rights issue brought on by a crisis). Examples of companies like this are real estate and tobacco companies.
Again based on the Yugoslav experience
Yeah, and the economy of Yugoslavia was a shining beacon to the rest of the world, wasn't it?
I think our current model works well. The owners name the members of the board, and then there's a union representative. What we should change is make board members far more personally legally resonsible in case of fraud or mismanagement of the company, ie big fines and long prison terms. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Fraud/mismanagement liability for board members, who represent shareholders, besides boosting board member liability insurance sales, further increases the weight of shareholder interests in firm decision-making. And, of course, I think society might want more 'mismanagement from the shareholder perspective' not less. Anyway, the external 'stick' of legal action is clumsy and easily corrupted into being ineffectual, compared to changing internal motivations. fairleft
