4 ms·

This makes a lot of sense now I think about it, but it does seem like institutionalized corruption? "We have 300K - shall we spend it improving our product or

• johannes1234321 6y ago
  When (ex-)politicians take a board seat corruption certainly is an issue. (I don't say that it's always a problem, but still a common issue) Within the economy itself board seats are given by the shareholders. Typically to tie investments together. If a fund is investing in company A and B they certainly want cooperation between A and B and place board members with such relations in there. This comes problematic if a strong shareholder uses this to shuffle revenue away from other shareholders into another company where they have a stronger majority (say investment fund F owns 50% of A and 90% of B and then fills A's board in a way to encourage the A company to buy as much consulting from B as possible) There (similar to democracy) minority rights and supervision by authorities like SEC is important. (While there is a school of thought, which argues that the minority shareholders simply should leave and the free market will handle this as an overpaying A won't survive in the market)