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You will still have a 'corporation' no matter how you constitute a corporate board of directors, so I don't think it's easy to say a corporations will be sociopathic no matter how its board of directors is constituted. If a society said that the majority of corporate board members needed to be elected by the firm's employees, then, well, that would be a very different corporation and possibly a less sociopathic one than the 'shareholders reps only on the board' corporation that exists (in most places) today.

I think boards of directors of corporations above a certain size should be a mix of elected employees plus representatives of shareholders, creditors, management, and local, regional, and national governments. In any case the design and re-design of boards of directors would be placed in the hands of the national democracy. If, of course, democracy is terminally corrupted by corporate influence, and it is, forget it.

fairleft

by fairleft (fairleftatyahoodotcom) on Mon May 24th, 2010 at 10:45:15 AM EST
[ Parent ]
But the board has very little actual power. Power resides only where it is exercised, which means that it resides with management and specialists - the technostructure, in a word - rather than with the directors.

Now, that's not to say that electing half the board from the employees wouldn't help. It almost certainly would help, particularly because it would serve to break the tendency for upper management to insulate itself in a bubble world of yes-men that see no evil, hear no evil and speak of no evil. (Although one would have to be wary of the kind of outsourcing shell games that always seem to crop up when a prerogative is made conditional on employee status.)

But it's not a magic bullet.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 24th, 2010 at 03:38:35 PM EST
[ Parent ]
Boards of directors have potentially all power, they just need to exercise it. It's economically sensible for shareholders to allow managers all corporate power as long as managers are heavily 'incentivized' to pursue shareholder profit uber alles (even though that approach to corporate goals is sociopathic and usually economically irrational). But, for any of the other stakeholders I mentioned, that approach toward latent/actual corporate power is irrational; it would not stand if most board of directors' power were in the hands of non-shareholders.

fairleft
by fairleft (fairleftatyahoodotcom) on Mon May 24th, 2010 at 04:49:11 PM EST
[ Parent ]
Boards of directors have potentially all power, they just need to exercise it.

The board does not have the information that it needs to exercise effective control of a large company. Hell, upper management does not normally have adequate information to exercise effective control of the large company.

The fact that it possesses the formal prerogative to exercise control is about as relevant as the Queen of England's prerogative to appoint the Prime Minister.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 24th, 2010 at 07:25:16 PM EST
[ Parent ]
So we have huge corporations rampaging over the Earth and - no one is in charge?

No wonder there are problems.

Although in fact many of the more aggressive and pernicious corporations are run as personal kingdoms. You don't need to know what the foot soldiers had for dinner to run an empire - you only need them to charge when you order them to. So the required information density can be quite low.

The core issue is really one of values. The battle is between democratic, pluralistic communitarianism, and oligarchical narcissistic quasi-monarchic self-aggrandisement.

There's no reason why you can't have a democratic, pluralistic and communitarian business collective. It's not a difficult thing to organise.

But the problem at the moment is the moral lockdown on the idea that this is a good thing to aim for. Narrative space is so poisoned with narcissistic individualism that it's like dealing with a culture of solipsistic sleep walkers, all of whom believe that reality doesn't apply to them - and that success is defined by the ability to impose reality on other people, rather than by allowing a rational consensus balanced by adventure to emerge.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon May 24th, 2010 at 08:15:44 PM EST
[ Parent ]
Nobody is "in charge" in the sense that there is somebody (or a small group of people) you can shoot to make things better.

If society wants to make corporations "better," it first has to figure out what it wants to use corporations for. At the moment, society has decided to deploy corporations in the service of ever greater material consumption, and the personal aggrandisement (and enrichment) of top corporate executives.

If we want corporations to remain in the service of "more," but cut back on the enrichment and personal aggrandisement of top executives, then management reform on the lines proposed above would probably do the trick. But if we also want the corporation to serve (or at least not obstruct) broader political and social objectives than the ever-faster conversion of raw materials and labour into consumer goods, we will have to engage with the levels below the top executives as well. Because the creed of "more" is quite well established in these lower levels (and it serves the organisational interests there very well, so it's not going to go away on its own).

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 24th, 2010 at 09:46:24 PM EST
[ Parent ]
My point is that creating "a democratic, pluralistic and communitarian business collective" might be even easier than you think: simply reform who gets to sit on the corporate board of directors. Corporate law is completely free and loose on this matter: anything you can think of is legal and easily doable, if there is the political will.

I agree with Jake S below, though, that it is difficult to get workers not to prioritize their own incomes and benefits over wider community and/or national/global interests, even if there is a minority community/regional/national representation on corporate boards. But that's why you will still 'always' need a government independent of workers' and capitalists' (and creditors') narrow interests.

fairleft

by fairleft (fairleftatyahoodotcom) on Tue May 25th, 2010 at 12:24:27 PM EST
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You're making the expertise argument against democracy. It's not a good one.

Anyway, boards can get the information they need (that currently they don't want), and can be expert enough to know when things are going horribly wrong. And, even if they cannot become experts (no one should expect democratic representatives to be experts on everything they make decisions on), boards can incentivize upper management in a socially beneficial direction and/or hire outside experts who can regulate upper management in that direction.

fairleft

by fairleft (fairleftatyahoodotcom) on Tue May 25th, 2010 at 12:08:05 PM EST
[ Parent ]
I'm not arguing against democracy. In point of fact, I am on record arguing for a half-and-half distribution between shareholder representatives and employee representatives in corporate boards. (Having representatives of various government levels directly on the board is a cute idea, but the revolving door is revolving quite fast enough for my taste already...)

I'm just pointing out that it is not sufficient, not arguing that it is not a good idea.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue May 25th, 2010 at 01:27:27 PM EST
[ Parent ]
Good. I see we really don't disagree, and I probably should've seen that sooner.

I'm not as confident as you about what would result from various corporate board reforms/revolutions, and think it's best to say "we don't know" the effects would be of reforming corporate boards in various ways.

My thinking, any of this sort of thinking really, assumes an environment where corporations and the wealthy would not be allowed to corrupt democracy with money and similar things. In that non-corrupted dream context, the people we elect to handle overall community interests are ideal people to have as insiders voting those interests on corporate boards. We might even want to give them the majority of 'votes'. But everything decided preliminarily has to be tentative, and communities and nations should be expected to learn from experience and keep modifying until they get things still imperfect but as good as probably possible and way the hell better than the current anti-social madness.

fairleft

by fairleft (fairleftatyahoodotcom) on Tue May 25th, 2010 at 02:42:51 PM EST
[ Parent ]

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