The Current Situation
Well currently corporations are run by investors, they vote for a Board of Directors and the Board of Directors hires a CEO to run the day to day operations. A metaphorical way to see this would be that the Board of Directors is like a nation's legislature (Senate, Congress, Parliament, etc), while the CEO would be like a nation's head of government (President, Prime Minister, etc). The goal of the investor is to make profit, profit and even more profit. If the corporation makes more profit this year than the last and the belief is held that the next year's profits will be even higher.... then the investor is extremely happy.
The problem with this situation is that there is a disconnect with reality between the investor and the rest of society. The concept that firing employees to make more profit as being self-destructive for all corporations who rely upon consumers is alien to the investor. They see the short term and immediate gain and even when someone speaks long term planning, they see this as meaning 5 years instead of 5 generations. When the medical profession indicates that absenteeism is based upon the extra workload and the extra stress which only began making its appearances when corporations tried to get 1 human being to work more than what a human could tolerate.... well the investor believes this to be a product of laziness (remember they would never tolerate the conditions that they attempt to impose upon honest workers).
Corporations have gone unchecked like a runaway train and the owners are happy because the train has made each of their stations in record time (some experts tell the owners that the train never stopped but kept going and this will lead to disaster but the owners ignore these warnings). Then listeriosis hits the food industry, financial markets go haywire, car manufacturers discover a major flaw in their best product..... Apologies come out but nothing really changes (you don't hear of any company wishing to rehire a laid-off workforce to do things correctly instead of cutting corners). More corners are to be cut and new lay-offs are planned with the remaining workers picking up the slack. "Do more with less" is the mantra of the day, then the investors get surprised when less is produced.
The Alternative
So since the investors and business leaders think its normal to practice self-destruction, like staying awake for 48 hours at a time and sleeping for 4 hours and then repeating the sequence and they don't want to stop and think about the consequences of such obvious foolishness, perhaps an international law should be imposed on all corporations. The details can always be worked out later, but here are the broad strokes. A corporation answers to three entities for its survival, the investor who provides capital, the worker who provides labor and the consumer who provides sales. Yet despite this fact, only the investor is represented in the leadership of the corporation (and we have all seen the foolishness that they can achieve).
So the proposed alternative is that we have the investors vote for one third of the Board of Directors, we have the workers vote for another third and we have the local government appoint the last third. The investors continue with the 1 share equals one vote. The workers go with one person equals one vote. Government appointees can not be major investors or workers in this company and preferably not related with anyone who is. The investors will have to negotiate with presenting their views as to making a profit (which is ok if tempered with reason), the workers will focus on productivity (which may mean reducing work hours while keeping the same salary and providing social benefits to make the employee happy and therefore less sick) and the government appointees will focus on consumer protection to make certain that any legitimate complaints on a product is heard quickly and dealt with and also make certain that advertising does not overwhelm the consumer with nonsense.
A confirmed member of the Board of Directors must not be allowed to be a member of another Board of Directors of ANY company. If someone can be a Board Member of more than one, they have just admitted that the workload is insufficient and perhaps they can occasionally work on the front-lines with the honest and hardworking individuals of their company to see how their decisions truly affect the people in the trenches. Could you imagine during World War 2 an individual being a US General leading tanks in Western Europe and then emailing the Pacific Fleet on how they should deploy their ships because he is also a US Admiral? Well there are many who are members of several Boards of Directors in various corporations. How can they find the time if this job is so important?
So since the investors and business leaders think its normal to practice self-destruction, like staying awake for 48 hours at a time and sleeping for 4 hours and then repeating the sequence and they don't want to stop and think about the consequences of such obvious foolishness, perhaps an international law should be imposed on all corporations. The details can always be worked out later, but here are the broad strokes. A corporation answers to three entities for its survival, the investor who provides capital, the worker who provides labor and the consumer who provides sales. Yet despite this fact, only the investor is represented in the leadership of the corporation (and we have all seen the foolishness that they can achieve).
So the proposed alternative is that we have the investors vote for one third of the Board of Directors, we have the workers vote for another third and we have the local government appoint the last third. The investors continue with the 1 share equals one vote. The workers go with one person equals one vote. Government appointees can not be major investors or workers in this company and preferably not related with anyone who is. The investors will have to negotiate with presenting their views as to making a profit (which is ok if tempered with reason), the workers will focus on productivity (which may mean reducing work hours while keeping the same salary and providing social benefits to make the employee happy and therefore less sick) and the government appointees will focus on consumer protection to make certain that any legitimate complaints on a product is heard quickly and dealt with and also make certain that advertising does not overwhelm the consumer with nonsense.
A confirmed member of the Board of Directors must not be allowed to be a member of another Board of Directors of ANY company. If someone can be a Board Member of more than one, they have just admitted that the workload is insufficient and perhaps they can occasionally work on the front-lines with the honest and hardworking individuals of their company to see how their decisions truly affect the people in the trenches. Could you imagine during World War 2 an individual being a US General leading tanks in Western Europe and then emailing the Pacific Fleet on how they should deploy their ships because he is also a US Admiral? Well there are many who are members of several Boards of Directors in various corporations. How can they find the time if this job is so important?
Concluding Remarks
What the best thing for each corporation would be to have the people on the top work alongside the lowest level entry position employees on occasion and get their hands dirty and appreciate that these workers are not lazy but sometimes over-worked. Again a show that shows owners and bosses heading in the right direction is the TV show "Undercover Boss". Now it isn't at the perfect destination of where corporations should be but it definitely allows the owners to open their eyes and see first hand the reality at the trenches.
Secondly, Unions were not mentioned because we are looking a corporate governance and not management/employee relations which is an entirely different thing. The Board of Directors position filled by employee votes would be like voting for a Canadian federal election while however the employees decide to organize their union and how they choose a completely different set of people to fill in as Union leaders would be like voting for a Canadian provincial election. Later on, managers could be voted as such by their immediate underlings like a municipal election. But these additional features are more modifying the system from the ground up and this blog was more on focusing modifying the system from the top down.
In each of these modified aspects, it necessitates that the worker be astute and democratically minded which will transfer over to his life outside of work which should be more important than his life at work. Work to live, yes! Live to work, no. A successful democratic society must give its citizens the tools to engage in other important aspects of life, where money is only one of many aspects and not the only aspect. Money is like a toy and if someone in society believes that toys are more important than anything else, then they should remain childlike and not be involved in the decision making aspects of an adult society. Toys are great, we can all enjoy the playtime, but we must stop playing with toys on occasion and get our responsibilities done, something the investor doesn't seem able to comprehend as he accumulates more and more toys at the expense of others.
What the best thing for each corporation would be to have the people on the top work alongside the lowest level entry position employees on occasion and get their hands dirty and appreciate that these workers are not lazy but sometimes over-worked. Again a show that shows owners and bosses heading in the right direction is the TV show "Undercover Boss". Now it isn't at the perfect destination of where corporations should be but it definitely allows the owners to open their eyes and see first hand the reality at the trenches.
Secondly, Unions were not mentioned because we are looking a corporate governance and not management/employee relations which is an entirely different thing. The Board of Directors position filled by employee votes would be like voting for a Canadian federal election while however the employees decide to organize their union and how they choose a completely different set of people to fill in as Union leaders would be like voting for a Canadian provincial election. Later on, managers could be voted as such by their immediate underlings like a municipal election. But these additional features are more modifying the system from the ground up and this blog was more on focusing modifying the system from the top down.
In each of these modified aspects, it necessitates that the worker be astute and democratically minded which will transfer over to his life outside of work which should be more important than his life at work. Work to live, yes! Live to work, no. A successful democratic society must give its citizens the tools to engage in other important aspects of life, where money is only one of many aspects and not the only aspect. Money is like a toy and if someone in society believes that toys are more important than anything else, then they should remain childlike and not be involved in the decision making aspects of an adult society. Toys are great, we can all enjoy the playtime, but we must stop playing with toys on occasion and get our responsibilities done, something the investor doesn't seem able to comprehend as he accumulates more and more toys at the expense of others.
2 comments:
I like your ideas. There is definitely a detachment from reality on the part of Investors, all they see is $$$, that's all they're concerned with and that's all that matters to them in the short, medium and long run.
Sadly, until companies fix that problem, we're still going to see corruption erode their management, not to mention the over-abuse of their labor force. Like you said, the mantra nowadays is "Do more, with Less".
Thanks for enlightening me, keep writing brother.
If investor would be "thinkers" as you like to say, well, that would solve the problem. It's their mentality we have to change.
I was about to complain about your suggestion with not allowing someone to be on more than one board. Doing two part-jobs is often quite interesting because it widens your perspective and helps you get a bigger picture of how society works. However, true, if you spend too little time everywhere, you're not implied anywhere (like in university).
I like the idea that those who think that toys are everything should just go back to kindergarden.
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