Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
Because you've pretty much killed big companies.

You say that like it would be a bad thing.

Fraudulent trading, for instance, strips the liability and the directors are liable for the debts of the company.

In which jurisdiction? And when was the last time this law was applied to any PLC (or the Irish equivalent)?

Limited liability is a small part of the issue. The other elements are:

  1. A revolving door between corporate management and government. Too often you get the same people doing both. Where you don't, you get close personal and financial connections between the people involved.

  2. Transnational tax evasion.

  3. The primary responsibility of corporations to create shareholder value, irrespective of social and ecological costs. (The fact the social and ecological costs are excluded from accounting practice makes this an unfair fight.)

  4. Massive near-Pharaonic power differentials between CEOs and board members and most workers.

  5. Internal power structures that reward sociopathy and punish social responsibility and ethical behaviour.

Fixing limited liability on its own won't fix these other issues.

What's needed is a total overhaul of the idea of a corporation as a collective enterprise. There are better and more democratic collective participatory models, but they're not being used.

There's nothing wrong in principle with the idea of collective effort. But current practice and law are literally feudal and medieval throwbacks, with features that date back to the time when monopolies in useful goods and services were granted as an aristocratic boon by a monarch.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Nov 14th, 2011 at 05:50:00 AM EST
[ Parent ]
A revolving door between corporate management and government. Too often you get the same people doing both. Where you don't, you get close personal and financial connections between the people involved.

Transnational tax evasion.

The primary responsibility of corporations to create shareholder value, irrespective of social and ecological costs. (The fact the social and ecological costs are excluded from accounting practice makes this an unfair fight.)

Massive near-Pharaonic power differentials between CEOs and board members and most workers.

Internal power structures that reward sociopathy and punish social responsibility and ethical behaviour.

Yes. Those would be a lot of the real problems.

Add to that the problems that investors have with corporate governance - too many companies are not run in the best interests of the investors for instance.

by Colman (colman at eurotrib.com) on Mon Nov 14th, 2011 at 05:54:21 AM EST
[ Parent ]
The issue of the alignment between shareholder interests and company interests is a tough one.

On the one hand, management paying itself insane bonuses is obviously not in the greater benefits of the shareholders.

On the other hand, an excessive focus on shareholder value has a tendency to force the worst kind of short-sighted, extractive decisions on the company, because selling everything off now will always be more profitable, now, then slowly building it over the next ten years.

by Zwackus on Mon Nov 14th, 2011 at 07:58:45 AM EST
[ Parent ]

Display:

Occasional Series