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The government should force public corporations to hold internal democratic elections every few years to select a new board and executives and limit how many te

The government should force public corporations to hold internal democratic elections every few years to select a new board and executives and limit how many terms a CEO can stay in office. The government is so busy fighting dictatorships overseas that it's forgetting about the dictatorships that are growing on its own soil.

SomeStupidPoint 9y ago
That seems... worse. It'll force companies that are still growing with a powerful CEO to stay private (or possibly just be destroyed, if they're already public) because of CEO churn. The effect of that will be that 'in' parties will get to participate in the growth, while the greater market (eg, retirement funds) get cut out of that. The effect will be that the rich get richer, while the public subsidizes their gains by buying in only at the very tail. (Essentially, just pushed down the line even further than now.) I think America actually is powerful because corporations aren't democratic. It allows the US to function as a macro-democratic republic (where the public controls the rules of the game) but micro-feudalistic society (where you have fiefs implementing those rules). Kings are efficient; republics are stable. So our infrastructure is republican, while our 'features' are feudalistic. If you believe in capitalism, this allows for efficient distribution of resources. What I think the US does wrong is not lubricate the transition between fiefdoms. Social safety nets lubricate transitions so that inefficient (poorly managed, badly conceived, etc) fiefdoms collapse quickly but the people who are involved aren't harmed and can smoothly transition into other ones of their choosing. That's the creative destruction of capitalism, optimized. So from my view, it's not that the problem is how corporations are managed, it's that America won't invest in her ideals -- at a societal level. So of course they don't work. Disclaimer: Work at publicly traded corp; views are mine, not employers.
- srtjstjsj 9y ago
  Companies aren't public to be nice. They are public because their value is locked up and the early owners want to cash out.
  - KGIII 9y ago
    My comment is too long, so I'm going to post it in two parts. First, I want to point out that you're right. It is true when you say, "Companies aren't public to be nice." That's true and I'm not going to argue that. The fact is, they aren't. However, that's not how it has always been. I'm not really able to find any good citations so I'm taking a little time to make something for you. It's important to understand the history of incorporation. To be incorporated (thus traded publicly) confers certain rights to a body of people. I know, people complain about Citizens United and how "corporations are people." But, that's actually pretty much always been true. "Corporations are invariably classified as "legal persons" by all modern systems of law, meaning that like natural persons, they may acquire rights and duties." [1] Because of this notion, once upon a time, the right to incorporate was controlled by the State. "At the Declaration of Independence, corporations had been unlawful without explicit authorization in a Royal Charter or an Act of Parliament of the United Kingdom." [2] In other words, the State controlled the ability to incorporate - in this case it was the monarchy. You needed a royal charter, at the least. (We still use the word charter.) Now, here's the kicker... We wanted to establish the right for a group of individuals to incorporate. We'd already decided that representative groups were a right (the right to peacefully assemble is a good indicator) and so we decided that we wanted to allow more freedom to incorporate. But, we knew that incorporation could lead to some negative consequences. The founders were pretty smart, in some ways. We also knew that the Federal Government was capable of being too large. This is a subject of great depth and we'll not get into it. Suffice to say, people aren't actually always being racists when they assert the importance of State's Rights. One of the earliest concerns about State Rights was actually about incorporation. The Feds had decided that a group of people had a right to incorporate without actually residing in the State they'd chosen to incorporate in. So, this led to many things but we're only concerned with one aspect. (I'm trying to be brief.) Namely, we didn't just want people to have the ability to incorporate without any controls. We still wanted government oversight and we still wanted to ensure that incorporated entities were a benefit to the public. So, back then - and in certain States (I'm unable to find an exact number in the time I've allowed myself to make this post), to incorporate actually required both introduction and vote on the Senate floor. "Prior to the late 19th century, most companies were incorporated by a special bill adopted by legislature." [3] By now, you're probably wondering what the whole point is of this wall of text, seemingly from a mad man. Well, I'm getting to that. So, way back then, we had the legislature approving of each individual group that sought to incorporate. On top of that, they were very willing and able to revoke their charter and to dissolve their corporation. "Early state corporation laws were all restrictive in design, often with the intention of preventing corporations for gaining too much wealth and power." [4] In other words, one of the absolute principles for founding a corporation was that it must be of benefit to the public. A corporation had to start and maintain their good to the public. A corporation had to provide a public good, they had to benefit the public, they had to be good stewards and citizens. That was explicitly what they had to do. So, you're right. Corporations don't have to be "nice." However, they used to have to be "nice." They used to have to be beneficial to the greater society. They had an obligation - because they were conferred rights they'd not normally have. To incorporate absolved the individual, and the shareholder, from many legal responsibilities and, in exchange, we (via our elected representatives) insisted that they provide a benefit to society as a whole. I'd think that qualifies as "nice." Don't you? Anyhow, we maintained this for quite some time. We enforced this with things like the Sherman Antitrust Act [5] and other such legislation. The Sherman Antitrust act is an important indicator of the obligations of corporations. This was better explained in 1993 in Spectrum Sports v. McQuillan [6] which explained it thusly: "The purpose of the [Sherman] Act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself." [7] Again, you're right! I'm absolutely not arguing with you. A company isn't public to be nice. However, it doesn't have to be that way - and it hasn't always been that way. There's absolutely no reason why a corporation should be allowed to exist if it is not, in fact, benefiting the public good.
kakarot 9y ago
If you founded a successful company, how would you feel if you were legally forced one day to resign from running it, even though you've done nothing wrong? Under either capitalism or communism, this seems unfair.
- jondubois 9y ago
  The fact that someone is allowed to be the leader of a massive too-big-to-fail company for the rest of their lives just because they happened to be employee #1 seems extremely unfair. We should stop pretending that the CEO is the one doing the work and delivering the value. Absolutely anyone can be a great CEO if they have lots of smart people under them.
  - kakarot 9y ago
    This is kind of a narrow way too look at things, isn't it? I think a founder of a company is more than "Employee #1". They are literally the person who envisioned and created the company. That deserves respect and if the founder is not harming the company or breaking laws, I don't see any reason why my government should have the legal ability to make them step down.
- cabalamat 9y ago
  > If you founded a successful company, how would you feel if you were legally forced one day to resign from running it Not particularly happy, but once a company is worth multiple hundreds of billions of dollars, the public interest if probably better served by the company's incentives being more closely aligned with wider society's wishes.
- srtjstjsj 9y ago
  If you worked at a successful company, how would you feel if you were legally forced to leave, even though you've done nothing wrong?
pjc50 9y ago
The owners - ie shareholders - can force elections whenever they want. The problem is really one of profit motive; why would they want to replace a CEO who's making them money? The natural trend of free markets is towards consolidation, eventually ending up with a small number of firms which can extract what economists call "monopoly rent".
- jondubois 9y ago
  The shareholders shouldn't have a say. Only the employees should have a say. The shareholders aren't the ones who are forced to spend their entire lives there. Otherwise it's like allowing rich foreign investors to vote for the US president just because they own a lot of shares in US companies.
  - deleted 9y ago
    [deleted]
  - pjc50 9y ago
    shrug that's capitalism - it's the price paid for having the investors fund a business in the first place, giving up control. There are employee-run businesses, co-operatives, but they can be outspent by the VC-funded businesses. Probably the nearest thing in the capitalist world is the German approach of worker's councils: https://www.german-way.com/german-workers-councils-demystified/ https://www.german-way.com/german-workers-councils-demystifi... Mandating transfer of power from the owners to the workers is, very literally, Communism. A description without implying value judgements of the relative systems.
    - deleted 9y ago
      [deleted]
    - kxyvr 9y ago
      Part of what you wrote elicited a deep sigh on my behalf. Transferring power from owners to workers is not literally communism, at all. Transfers of power happen all the time when new legislation is passed to create worker protection laws or to weaken them. By your definition, OSHA would be labeled as communism since it transferred a certain amount power within a business to the workers by given them an increased amount of rights while working for an employer. And, to be sure, I've heard management also label OSHA as communist, but it's not. Look, as you mentioned, there are many different kinds of workplace organizational structures. Corporations with a board are one, employee run companies are another, and cooperatives are yet another. However, the government does have a hand in and does set rules for what structures are allowed. That was part of the contention between VW and the state of Tennessee about the works council. It didn't appear to be allowed under law, so they tried to back walk one through a union, which ultimately failed. In my opinion, that back walking should have never been necessary and the structure should have been allowed. That's a long way to say that we as a society do have a role in deciding what organizational structures are and are not allowed for businesses. We already do it, but the tone tends to be that a traditional corporate structure is the pinnacle and anything else that transfers power to workers is communist. That, again, is not true and we should be having a more honest and candid conversation about these structures and the kind of society that we want.

SomeStupidPoint 9y ago

That seems... worse. It'll force companies that are still growing with a powerful CEO to stay private (or possibly just be destroyed, if they're already public) because of CEO churn. The effect of that will be that 'in' parties will get to participate in the growth, while the greater market (eg, retirement funds) get cut out of that. The effect will be that the rich get richer, while the public subsidizes their gains by buying in only at the very tail. (Essentially, just pushed down the line even further than now.) I think America actually is powerful because corporations aren't democratic. It allows the US to function as a macro-democratic republic (where the public controls the rules of the game) but micro-feudalistic society (where you have fiefs implementing those rules). Kings are efficient; republics are stable. So our infrastructure is republican, while our 'features' are feudalistic. If you believe in capitalism, this allows for efficient distribution of resources. What I think the US does wrong is not lubricate the transition between fiefdoms. Social safety nets lubricate transitions so that inefficient (poorly managed, badly conceived, etc) fiefdoms collapse quickly but the people who are involved aren't harmed and can smoothly transition into other ones of their choosing. That's the creative destruction of capitalism, optimized. So from my view, it's not that the problem is how corporations are managed, it's that America won't invest in her ideals -- at a societal level. So of course they don't work. Disclaimer: Work at publicly traded corp; views are mine, not employers.

srtjstjsj 9y ago
Companies aren't public to be nice. They are public because their value is locked up and the early owners want to cash out.
- KGIII 9y ago
  My comment is too long, so I'm going to post it in two parts. First, I want to point out that you're right. It is true when you say, "Companies aren't public to be nice." That's true and I'm not going to argue that. The fact is, they aren't. However, that's not how it has always been. I'm not really able to find any good citations so I'm taking a little time to make something for you. It's important to understand the history of incorporation. To be incorporated (thus traded publicly) confers certain rights to a body of people. I know, people complain about Citizens United and how "corporations are people." But, that's actually pretty much always been true. "Corporations are invariably classified as "legal persons" by all modern systems of law, meaning that like natural persons, they may acquire rights and duties." [1] Because of this notion, once upon a time, the right to incorporate was controlled by the State. "At the Declaration of Independence, corporations had been unlawful without explicit authorization in a Royal Charter or an Act of Parliament of the United Kingdom." [2] In other words, the State controlled the ability to incorporate - in this case it was the monarchy. You needed a royal charter, at the least. (We still use the word charter.) Now, here's the kicker... We wanted to establish the right for a group of individuals to incorporate. We'd already decided that representative groups were a right (the right to peacefully assemble is a good indicator) and so we decided that we wanted to allow more freedom to incorporate. But, we knew that incorporation could lead to some negative consequences. The founders were pretty smart, in some ways. We also knew that the Federal Government was capable of being too large. This is a subject of great depth and we'll not get into it. Suffice to say, people aren't actually always being racists when they assert the importance of State's Rights. One of the earliest concerns about State Rights was actually about incorporation. The Feds had decided that a group of people had a right to incorporate without actually residing in the State they'd chosen to incorporate in. So, this led to many things but we're only concerned with one aspect. (I'm trying to be brief.) Namely, we didn't just want people to have the ability to incorporate without any controls. We still wanted government oversight and we still wanted to ensure that incorporated entities were a benefit to the public. So, back then - and in certain States (I'm unable to find an exact number in the time I've allowed myself to make this post), to incorporate actually required both introduction and vote on the Senate floor. "Prior to the late 19th century, most companies were incorporated by a special bill adopted by legislature." [3] By now, you're probably wondering what the whole point is of this wall of text, seemingly from a mad man. Well, I'm getting to that. So, way back then, we had the legislature approving of each individual group that sought to incorporate. On top of that, they were very willing and able to revoke their charter and to dissolve their corporation. "Early state corporation laws were all restrictive in design, often with the intention of preventing corporations for gaining too much wealth and power." [4] In other words, one of the absolute principles for founding a corporation was that it must be of benefit to the public. A corporation had to start and maintain their good to the public. A corporation had to provide a public good, they had to benefit the public, they had to be good stewards and citizens. That was explicitly what they had to do. So, you're right. Corporations don't have to be "nice." However, they used to have to be "nice." They used to have to be beneficial to the greater society. They had an obligation - because they were conferred rights they'd not normally have. To incorporate absolved the individual, and the shareholder, from many legal responsibilities and, in exchange, we (via our elected representatives) insisted that they provide a benefit to society as a whole. I'd think that qualifies as "nice." Don't you? Anyhow, we maintained this for quite some time. We enforced this with things like the Sherman Antitrust Act [5] and other such legislation. The Sherman Antitrust act is an important indicator of the obligations of corporations. This was better explained in 1993 in Spectrum Sports v. McQuillan [6] which explained it thusly: "The purpose of the [Sherman] Act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself." [7] Again, you're right! I'm absolutely not arguing with you. A company isn't public to be nice. However, it doesn't have to be that way - and it hasn't always been that way. There's absolutely no reason why a corporation should be allowed to exist if it is not, in fact, benefiting the public good.

kakarot 9y ago

If you founded a successful company, how would you feel if you were legally forced one day to resign from running it, even though you've done nothing wrong? Under either capitalism or communism, this seems unfair.

jondubois 9y ago
The fact that someone is allowed to be the leader of a massive too-big-to-fail company for the rest of their lives just because they happened to be employee #1 seems extremely unfair. We should stop pretending that the CEO is the one doing the work and delivering the value. Absolutely anyone can be a great CEO if they have lots of smart people under them.
- kakarot 9y ago
  This is kind of a narrow way too look at things, isn't it? I think a founder of a company is more than "Employee #1". They are literally the person who envisioned and created the company. That deserves respect and if the founder is not harming the company or breaking laws, I don't see any reason why my government should have the legal ability to make them step down.
cabalamat 9y ago
> If you founded a successful company, how would you feel if you were legally forced one day to resign from running it Not particularly happy, but once a company is worth multiple hundreds of billions of dollars, the public interest if probably better served by the company's incentives being more closely aligned with wider society's wishes.
srtjstjsj 9y ago
If you worked at a successful company, how would you feel if you were legally forced to leave, even though you've done nothing wrong?

pjc50 9y ago

The owners - ie shareholders - can force elections whenever they want. The problem is really one of profit motive; why would they want to replace a CEO who's making them money? The natural trend of free markets is towards consolidation, eventually ending up with a small number of firms which can extract what economists call "monopoly rent".

jondubois 9y ago
The shareholders shouldn't have a say. Only the employees should have a say. The shareholders aren't the ones who are forced to spend their entire lives there. Otherwise it's like allowing rich foreign investors to vote for the US president just because they own a lot of shares in US companies.
- deleted 9y ago
  [deleted]
- pjc50 9y ago
  shrug that's capitalism - it's the price paid for having the investors fund a business in the first place, giving up control. There are employee-run businesses, co-operatives, but they can be outspent by the VC-funded businesses. Probably the nearest thing in the capitalist world is the German approach of worker's councils: https://www.german-way.com/german-workers-councils-demystified/ https://www.german-way.com/german-workers-councils-demystifi... Mandating transfer of power from the owners to the workers is, very literally, Communism. A description without implying value judgements of the relative systems.
  - deleted 9y ago
    [deleted]
  - kxyvr 9y ago
    Part of what you wrote elicited a deep sigh on my behalf. Transferring power from owners to workers is not literally communism, at all. Transfers of power happen all the time when new legislation is passed to create worker protection laws or to weaken them. By your definition, OSHA would be labeled as communism since it transferred a certain amount power within a business to the workers by given them an increased amount of rights while working for an employer. And, to be sure, I've heard management also label OSHA as communist, but it's not. Look, as you mentioned, there are many different kinds of workplace organizational structures. Corporations with a board are one, employee run companies are another, and cooperatives are yet another. However, the government does have a hand in and does set rules for what structures are allowed. That was part of the contention between VW and the state of Tennessee about the works council. It didn't appear to be allowed under law, so they tried to back walk one through a union, which ultimately failed. In my opinion, that back walking should have never been necessary and the structure should have been allowed. That's a long way to say that we as a society do have a role in deciding what organizational structures are and are not allowed for businesses. We already do it, but the tone tends to be that a traditional corporate structure is the pinnacle and anything else that transfers power to workers is communist. That, again, is not true and we should be having a more honest and candid conversation about these structures and the kind of society that we want.