“This is our highest priority,” said John Castellani, president of the Business Roundtable, which represents 170 chief executives. “Literally all of our members have called about this.” Last week alone, Castellani said, 40 chief executives were in town visiting Capitol Hill about [the proposal]. Concern cuts across industry lines. Steve Odland of Office Depot, Ivan Seidenberg of Verizon and Jim McNerney of Boeing have all been in Washington arguing against the provision. So has Ursula Burns of Xerox, who is the vice chairman of President Obama’s Export Council and a longtime supporter of his. Obama supports [the proposal].
More evidence that we defer to almost-transparently self-serving authorities more often than we like to admit to ourselves.
If by "we" you mean politicians who are lobbied intensively by powerful corporate executives who have more political clout than ever, then you are probably right. But I suspect you are making this a more universal argument about the way people are.
"“We talk about shareholder democracy, but what we really mean is activist hedge funds and state-pension-fund democracy,” she said. “There’s really no evidence this is going to benefit long-term diversified investors, which means the rest of us.”"
Why on Earth would hedge funds have different interests to other shareholders? Don't they all want to maximise the net present value of dividend payments?
Is there any economic justification for government involvement in corporate management to begin with? It seems to me that private experimentation in different management and ownership agreements would yield the best results here.
Who is 'we' here? Regulatory agencies are not eager to admit that they're vulnerable to capture by the regulated interests, but this doesn't imply that the general public will fail to acknowledge this as a problem.
I think Robin Hanson is arguing here "that we defer to almost-transparently self-serving authorities more often than we like to admit to ourselves", not that proxy access is good or bad.
If proxy access is so good for shareholders, why don't companies commit to it when listing themselves on the stock exchange? After all, well-managed companies should have higher stock prices.
The same issue applies to anti-takeover provisions; if these provisions turn out to be bad for stockholders, companies could easily refrain from adopting them.
Tomasz, if you follow the link labeled "in January" and then follow the link on that blog post, then you'll end up here. The article has a long argument of why increasing shareholder power improves outcomes. The argument relies on both theoretical and empirical evidence.
Before we can be mad about this elitist control over public companies, don't we have to imagine the future of shareholder activists and state retirement funds, etc..., running things? I'm not worried about hedge funds that are looking for quick profits but I am worrid about a new set of rent seekers. I'm worried that these rent seekers would have a long ugly run before the contradictions became unsurvivable.)
This is the same problem with people trying to kill the teachers' unions. Who will step into the breach? We may be getting C-level management now, but why do you suspect we'll end up will B-level rather than D?
I'm disappointed in you. Different countries have significantly different laws regarding corporate management - and you don't seem to have bothered to look for evidence that some laws are more effective than others. This shouldn't be terribly difficult. Instead, this is just theorizing in absence of evidence, which rarely leads to truth.
(I have absolutely no idea if proxy access is a good or bad idea. Because of this I'd default to not changing status quo, whatever it is, as most random changes turn out to be bad. I'd expect most people to share such attitude, unless they have strong evidence one way or the other, or generalize from other domains like you here.)
anon, that is the big hard question.
tom, we already know what a world without insider trading rules looks like; we didn't have them until the SEC created them.
Robert, if the public disliked current rules, politicians would campaign on platforms of changing them, and be elected.
More evidence that we defer to almost-transparently self-serving authorities more often than we like to admit to ourselves.
If by "we" you mean politicians who are lobbied intensively by powerful corporate executives who have more political clout than ever, then you are probably right. But I suspect you are making this a more universal argument about the way people are.
"“We talk about shareholder democracy, but what we really mean is activist hedge funds and state-pension-fund democracy,” she said. “There’s really no evidence this is going to benefit long-term diversified investors, which means the rest of us.”"
Why on Earth would hedge funds have different interests to other shareholders? Don't they all want to maximise the net present value of dividend payments?
Is there any economic justification for government involvement in corporate management to begin with? It seems to me that private experimentation in different management and ownership agreements would yield the best results here.
Who is 'we' here? Regulatory agencies are not eager to admit that they're vulnerable to capture by the regulated interests, but this doesn't imply that the general public will fail to acknowledge this as a problem.
I think Robin Hanson is arguing here "that we defer to almost-transparently self-serving authorities more often than we like to admit to ourselves", not that proxy access is good or bad.
Just goes to show you how much a corporation is not its shareholders, but its management.
Shareholders are WDS, Weak Dumb and Scattered.
And, management likes it that way.
If proxy access is so good for shareholders, why don't companies commit to it when listing themselves on the stock exchange? After all, well-managed companies should have higher stock prices.
The same issue applies to anti-takeover provisions; if these provisions turn out to be bad for stockholders, companies could easily refrain from adopting them.
Tomasz, if you follow the link labeled "in January" and then follow the link on that blog post, then you'll end up here. The article has a long argument of why increasing shareholder power improves outcomes. The argument relies on both theoretical and empirical evidence.
Before we can be mad about this elitist control over public companies, don't we have to imagine the future of shareholder activists and state retirement funds, etc..., running things? I'm not worried about hedge funds that are looking for quick profits but I am worrid about a new set of rent seekers. I'm worried that these rent seekers would have a long ugly run before the contradictions became unsurvivable.)
This is the same problem with people trying to kill the teachers' unions. Who will step into the breach? We may be getting C-level management now, but why do you suspect we'll end up will B-level rather than D?
I'm disappointed in you. Different countries have significantly different laws regarding corporate management - and you don't seem to have bothered to look for evidence that some laws are more effective than others. This shouldn't be terribly difficult. Instead, this is just theorizing in absence of evidence, which rarely leads to truth.
(I have absolutely no idea if proxy access is a good or bad idea. Because of this I'd default to not changing status quo, whatever it is, as most random changes turn out to be bad. I'd expect most people to share such attitude, unless they have strong evidence one way or the other, or generalize from other domains like you here.)