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Corporate boards in USA don't include workers because workers would pull money away from the shareholders and executives in the form of pay raises and better be
by prolikewh0a 8y ago
Corporate boards in USA don't include workers because workers would pull money away from the shareholders and executives in the form of pay raises and better benefits for lower level employees.
- e40 8y agoUnless they had a majority, that is not true. Having 1 or 2 workers on the board would be a good thing, I believe. Too many boards are out of touch with what goes on in the company.
- ProAm 8y ago> Too many boards are out of touch with what goes on in the company. Do you have examples of this?
- yardie 8y agoTSLA
- ProAm 8y agoHow are they not in touch with what is going on in the company? The chairman seems extremely aware and involved with it. Im not being sarcastic, I'm really interesting in how/which companies people think the board is out of touch and how they are out of touch.
- Joky 8y agoYou had to pick THE company whose CEO is actually spending a large part of his time in the factory?
- mysterypie 8y agoI had to google TSLA to realize it was Tesla. What's up with using stock symbols? You saved one letter by not writing Tesla.
- jayalpha 8y agoSorry, but have you ever worked in a bigger company? The problems in a company are obvious for most workers.
- jimduk 8y agoI used to work for a while as a management consultant, and, in my personal experience, would rephrase the above as "a subset of the smart, engaged workers in a company, can often tell you 80%, of the main problems in week 1, which makes you wonder why the CEOs ( who are smart) hire you to address those problems, as well as the trickier 20%
- ProAm 8y agoI have, and in reality most of the problem are not real problems (at least the ones from the workers perspectives) when viewed from the C-level and board perspective. But Im still waiting for examples of companies where this is taking place and am certainly willing to accept my position is a wrong one but no one has provided a credible example yet.
- cannonedhamster 8y agoTyco, Ericsson, Comcast, IBM, GE to name a few. All of these companies are rotting from the inside out and management and contractor heavy.
- ProAm 8y agoCan you provide examples as to how? People just keep naming companies but no examples.
- forapurpose 8y ago> The problems in a company are obvious for most workers. I agree that workers see things that management doesn't, and good managers are aware of that and work hard to overcome it. However, having seen both sides of that coin, workers also lack awareness of many issues and constraints. They think, 'why don't we just do X? It's obvious!', without realizing that X would cost the company a major investor or partner, or put the company in the crosshairs of a dangerous competitor; or that X would divert resources from a higher priority; or that the CIO, who is great in every other way, opposes X and it's not worth alienating them; etc.
- justonepost 8y agoTHey don't need a majority. They'd use it as negotiating leverage, ie, I'll vote this way if you vote that way. What's interesting though is that Germany is an industrial powerhouse compared to the US.
- skookumchuck 8y ago> What's interesting though is that Germany is an industrial powerhouse compared to the US. The DAX is up 37% since 2015, the S&P500 is up 74%. (That's as far back as DAX goes on Yahoo finance.)
- jayalpha 8y agoHe said industrial powerhouse, not financial powerhouse.
- skookumchuck 8y agoIt's not the banking industry that is driving the stock market in the US.
- jayalpha 8y agoBased on P/E ratios, it's not the economy either.
- jayalpha 8y ago"What's interesting though is that Germany is an industrial powerhouse compared to the US." There are two reasons for that. 1. The US has the stuff she develops produced abroad (IT, Computer, Phones etc.), mainly due to tax reasons (Produce in China, sell to Hongkong, sell to the US, major mark up in HK is done tax free). 2. German companies don't not pay their engineers. You can make more as a dog walker in the US or an English teacher in China than as many engineers in Germany.
- deleted 8y ago[deleted]
- smsm42 8y agoAnd one worker on the board would change that? How? If the managers - whose duty is supposed to be knowing what's going on, that's literally what they are paid for - can't, how one person whose job is doing something else, could in addition to that gain adequate knowledge of what's going on that is impossible for others to gain? Especially in a company that has, say, a hundred of people? Best case they would know what's going in their corner of work, but in any company which doesn't fit in a single room that won't be representative of others. Unless you make that worker spend whole day on figuring what's going on, talking with all workers from all other rooms, systematizing and analyzing and processing this information to make conclusions - by which time, you just made him a manager.
- walshemj 8y agoThey would be acting as a nonexec director it would effectively be a fulltime role maybe 2 days a week minimum.
- gowld 8y agoBy the same argument, shareholders shouldn't be on the board either, since they aren't management.
- smsm42 8y agoIf the only consideration is "knowing what's going on" then yes. But shareholders are owners, so they may demand participation even if they don't know anything, just for the fact they actually own the company (at last partially).
- cannonedhamster 8y agoBy that token employees who own company stock should have a place on the board.
- geezerjay 8y ago> Unless you make that worker spend whole day on figuring what's going on, talking with all workers from all other rooms, Workers representatives are picked to represent workers in negotiations and discussion, and their job is to spend the whole day figuring what's going on.
- incadenza 8y agoYeah agreed, I don’t consider this complicated.
- deleted 8y ago[deleted]
- imglorp 8y agoOne might argue that happy, engaged workers would make more money for everyone, top to bottom.
- fake-name 8y agoThat sounds like socialism. You'd better be careful, someone might call the house un-american activities committee on you. /s, though only to an uncomfortably small extent.
- dang 8y agoPlease don't take HN threads into ideological flamewar. We're really trying to avoid that here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- fake-name 8y agoHuh? I'm legitimately missing what's controversial here.
- dang 8y agoI've written about this a lot, if you want to read about it: https://hn.algolia.com/?sort=byDate&dateRange=all&type=comment&storyText=false&prefix=false&page=0&query=by:dang%20generic%20ideological https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme... Most of those comments are ironically pretty generic but there is also plenty of explanation.
- 794CD01 8y agoIf that argument were compelling, shareholders would do that. They aren't in it just to spite workers.
- throwaway2048 8y agoShareholders don't always act in a rational way, plenty of companies and trillions in shareholder value have been destroyed by stupid short sighted shareholder demands.
- kartan 8y ago> And executives That is the key. Executives are taking the lion's share. https://www.cnbc.com/2018/01/22/heres-how-much-ceo-pay-has-increased-compared-to-yours-over-the-years.html https://www.cnbc.com/2018/01/22/heres-how-much-ceo-pay-has-i...
- pathseeker 8y agoPedantic nit: they aren't taking the lion's share, they are just taking a much larger share. CEO pay makes up a small fraction of total pay given to all employees so it's not "the lion's share".
- deleted 8y ago[deleted]
- perfmode 8y agowhat qualifies as a lions share?
- Mtinie 8y ago> what qualifies as a lions share? If you follow Phaedrus's telling[0], introduced as "Partnership with the mighty is never trustworthy" -- all of it: "I take the first portion because of my title, since I am addressed as king; the second portion you will assign to me, since I’m your partner; then because I am the stronger, the third will follow me; and an accident will happen to anyone who touches the fourth." Other versions from around the world typically have the lion taking a majority of whatever is being divided, and whenever possible, everything. --- [0] https://en.wikipedia.org/wiki/Lion%27s_share#The_Phaedrus_version https://en.wikipedia.org/wiki/Lion%27s_share#The_Phaedrus_ve...
- Consultant32452 8y agoThe better question, in my opinion, is what qualifies as a "CEO?" The article makes it clear that they just cherry-picked the top paid 350 CEOs in the country. But there's nearly a quarter million CEOs in the US.
- philwelch 8y agoMaybe they just would pull money away from shareholders and executives in the form of pay raises and better benefits for senior employees, particularly the ones who run the union (https://philip.greenspun.com/flying/unions-and-airlines https://philip.greenspun.com/flying/unions-and-airlines). Also, by enforcing a closed shop, they could simultaneously pull money away from lower level employees, in the form of union dues, and funnel it to the benefit of the people who run the union. Sometimes they even funnel the money to the Mafia (https://en.wikipedia.org/wiki/Jimmy_Hoffa https://en.wikipedia.org/wiki/Jimmy_Hoffa). The moral hazards inherent in a "handful of powerful leaders who represent the interests of $GROUP" doesn't change much when $GROUP is "workers" instead of "shareholders". Executives and union organizers are often two sides of the same coin in that respect.
- eseehausen 8y agoExcept the groups they represent are different. Executives represent the shareholders and labor organizers represent labor. Even if you say a large part of the benefits are lost due to corruption in both cases, it shapes where the remainder ends up.
- chimeracoder 8y ago> labor organizers represent labor. Unions claim to represent labor, but due to a confluence of laws, there's no guarantee that they actually do, as pointed out above. Even within a union, politics exists, and those who are influential and important are able to extract resources away from those who are viewed as dispensible.
- refurb 8y agoNot sure why you’re being downvoted. You last sentence is true for any human organization. Politics exist and those with power sometimes take from those who don’t. That includes unions.
- AnthonyMouse 8y ago> Except the groups they represent are different. Executives represent the shareholders and labor organizers represent labor. Even if you say a large part of the benefits are lost due to corruption in both cases, it shapes where the remainder ends up. But you have to compare it to the alternative. The question is whether the incremental amount the union gets from management over what the employee would have gotten for themselves is more than the overhead/corruption cost of the union. For shareholders of public companies there is little choice. If you own $1000 each worth of a hundred different companies, you're not going to have the time or incentive to manage them all properly yourself (and neither is any other individual shareholder), so the benefit of hiring a board to do it is worth the cost. The math is a lot different when you only have one employer and you're getting ~100% of your income from them. In that case people have a strong incentive to do their own research and try to get the best possible employment for themselves. It's the same reason most companies with a single owner are owner-operated. About the only thing a union is going to get you is leveraging its monopoly power, which only works against monopolistic employers that have enough margins to pay you more without themselves becoming uncompetitive and also individually represent too much of the industry to just let everyone walk out and hire all different low level employees. This is why, for example, unions worked well for workers in the dominant era of the Big Three American auto companies, and much less well now that they have aggressive competition from Japan, Germany and Korea. But their cars are a lot better now. A lot more people died back then. Other people wrote scathing books and passed new laws. Uncompetitive markets are terrible.
- atmosx 8y agoHm, it did not work like that in Germany in the 90s and 00s. Workers were persuaded not to go after raises, although profits soared, to avoid losing jobs to countries like Poland. The German government decided to keep the surplus from exports and indirectly brag about it, as if countries are households. The result of this idiotic policy was of course that German industry scored record profits, but wages remained stagnant for ~20 years since by not investing in infrastructure the govt kept wages low “virtually”. Then negative interest rates came, the EU went berserk and the AfD is the third political power in Germany. So much for the surplus. Back to the matter at hand... having workers in the board helps, but doesn’t secure raises.
- antman 8y agoSpecifically in one case I can recall the workers did not go after raises because the union leader was bribed and later convicted. Even after his conviction the workers could not take back the deal.
- walshemj 8y agoYes IG Metal and others seemed to have dropped the ball in not getting payback for restraint earlier.
- nstj 8y agoWhat does it mean to "keep the surplus from exports"?
- geezerjay 8y agoMy guess is that's a loaded term to reffer to Germany's positive trade balance.
- zaphirplane 8y agoI have no doubt a government is to blame for the financial stagnation or decline. Thou not clear on how they are responsible for having companies produce massive profits and keeping wages low.
- naravara 8y agoIt amazes me how often articles about this sort of stuff treat the weakness of American labor as some sort of inherent property of the soil or our culture. People are quick to talk about squishy topics like individualism but gloss over or completely ignore the fact that we used to literally beat up and assassinate labor leaders.
- djrogers 8y ago> gloss over or completely ignore the fact that we used to literally beat up and assassinate labor leaders. Speaking of glossing over - let’s not pretend that the history of violence in the US labor movement was all one way...
- monetus 8y agoAny examples for the rest of us?
- fsloth 8y agoNot OP but I like this answer in Quora related to your question: https://www.quora.com/How-and-why-did-some-labor-unions-become-intertwined-with-organized-crime-like-the-mafia https://www.quora.com/How-and-why-did-some-labor-unions-beco...
- TangoTrotFox 8y agoIf you look back in US history, strikes and such were frequently supported by arms. One of the more famous was the 'Pinkerton Rebellion' [1]. It's interesting to consider the interweaving between class, guns, labor rights, and social order in general. It's certainly much more more nuanced than most people give thought to now a days. [1] - https://en.wikipedia.org/wiki/Homestead_strike https://en.wikipedia.org/wiki/Homestead_strike
- gaoshan 8y agoDefinitely was not one way because both sides committed acts of violence right? Specifically, on one side you had people committing violence in order to retain their positions of power and advantage over a weaker group and on the other you had people doing it in order to improve their positions of weakness and disadvantage against a more powerful group. In some ways it's kind of like when a lion attacks a gazelle and the gazelle fights back... that kind of "not all one way".
- mac01021 8y agoThe board is supposed to be all about shareholders, right? Why are executives a consideration?