Tuesday, January 22, 2013

Down With Delaware!

Comment: Forward to the next quarter-century of stakeholder value

Comments (0) | 14 Dec 2012 | RatingRating (-1 to +1): 0.0 | Print

Ian Williams calls for a change in IR focus over the next 25 years

As IR Magazine reports on its Q1 (first quarter-century), the profession it covers surely stares redundancy in the face in Q2, becoming more a case of investor relativity than investor relations.

How do you ‘relate’ to a transitory blip on a trading screen churning at near light speed? And at the other end of the velocity spectrum, how do you deal with an index fund that will yawn at whatever you say and only move when you get on or off a list?

During IR Magazine’s quarter-century, the role of investor relations has seen momentous changes – and I’m not just talking about the obsolescence of the fax, even though a little over a decade ago most IROs thought life was inconceivable without it.

There is a shrinking universe of stock held by ‘interested’ shareholders – people who have bought into a company and what it does, as opposed to those who have just taken an option on a trading opportunity.

Interestingly, though, within that diminishing population of stockholders, the proportion of those who take an active proxy interest in companies appears to be growing.

It’s good to talk

The best IROs see themselves as two-way communicators, telling management what the shareholders want while briefing the latter on the state of the company.

The cold reality, however, is that while, technically, shareholders might pay IR departments’ salaries, it is the CFOs and CEOs who sign the checks. Hardly surprising, then, that even the most conscientious IRO’s agenda should reflect that of the executive team.

Which raises an interesting question: will IROs in future be concentrating on votes, trying to head off challenges to ‘their’ executives from the theoretical owners who are getting increasingly uppity with each passing proxy fight?

There should be some inner ethical wrangling there. IROs tend to be well rounded and aware, almost Renaissance figures in the breadth of their knowledge and the scope of their activities.

Could they sleep easily while spending their waking days defending incompetent and overpaid executives against the concerns of the real owners of the company?

A better employment guarantee for the future of IR is to expand its audience to include those who invest their lives in companies. As shareholders march on corporate castles with torches, tumbrels and pitchforks, arguing whether ‘tis better to bury CEOs at the crossroads with stakes through their hearts or to burn them at the stake, the question that arises is, ‘What about the stakeholders?’

Dumbest idea in the world

For example, it would have been an admirable learning experience for Jack Welch to explain to GE employees his ideas of what constituted good management before he axed 100,000 of them.

If he had had to do so, it might not have taken him until 2009 – a full eight years after he had left the company – to argue in an interview with the Financial Times, with characteristic vigor but less-than-charasteristic philosophy: ‘Shareholder value is a result, not a strategy… Your main constituents are your employees, your customers and your products. On the face of it, shareholder value is the dumbest idea in the world.’

It was, of course, Jack ‘the Ripper’ Welch who 30 years ago invented ‘shareholder value’, which acted as a form of plenary indulgence for getting managements out of Purgatory afterwards.

And for too long IR has overemphasized selling management’s fevered visions to the stockholders and raising the stock price while ignoring the main consequence, which is that the CEO’s emoluments increase regardless of how well the company does – in the case of Welch, even after his retirement.

Accompanying this managerial aggrandizement has always been a pious invocation of executive duty to the shareholders as the sole owners with fiduciary interest in the conduct of a company, even though in reality it has usurped stockholder power and looted companies.

The bitter rearguard battles in courts and Congress to stop or dilute say on pay are eloquent testimony to that, not least because they involved using shareholders’ money to subvert shareholders’ rights.

This model has failed companies and destroyed countries, as Welch seems to have realized now he is no longer a beneficiary. As the Harvard Business Review, publisher of the Legatum Prosperity Index, points out: ‘For Americans, the headline is a simple if unwelcome one: the US is a nation in decline. For the first time, the US does not rank among the top 10 countries in the world in terms of overall prosperity.’

A downward spiral

In every measure of satisfaction distributed across a population, the US has been sliding down the scale, as indeed has its close emulator the UK.

The UN Development Programme’s Human Development Index, the World Bank’s index and many others all record the inexorable Anglo-Saxon slide down the rankings. Even on productivity, the US is falling through the ranks.

It is surely no coincidence that all the countries passing the US and the UK in the fast lane share a prejudice that there is more to success than ‘shareholder value’.

The list is interesting. Apart from Canada, Australia and New Zealand, which all have union movements and a social democratic tradition of regulation and worker protection, the other eight countries are European and go beyond that: they provide for employee representation on boards of companies.

This is a far cry from how they do things in Delaware, but it makes sense. These European employees are stakeholders in every sense of the word: their input, investment and interest in the company are far broader than those of a transitory shareholder whose ownership might only be a twitch of electrons in a silicon chip.

Indeed, through pension funds, mutual funds and even direct holdings, many employees are stakeholders in the specific terms that even US corporate law accepts.

It must be true, as Welch told the FT so: ‘The idea that shareholder value is a strategy is insane. It is the product of your combined efforts – from the management to the employees.’

People in IR, the future is at stake! In Q2, there should be no slack for corporate looters!

Left Right, Left Right.

 Letter from America TRIBUNE,
25 January 2012

The conservative right has some old leftist failings

 The United States invented the loyalty oath, inflicting it, ironically, on the loyalists who had had the temerity to disagree with the founding fathers. In fact, proportionately more Americans fled the 13 ex-colonies after 1776 than Russians and French left their countries after their revolutions. In a similar form, for much of the 20th century, the left made various shibboleths a test of authentic “lefthood”, whether support for the nationalisation of assorted numbers of companies from 50 to 500, support for Provisional IRA terror, support for gay marriage, Cuba and Hugo Ch├ívez. Such “support” was, and usually still is, inconsequential in its practical effects on its subjects.
 The issues might have more tangible reality than Gulliver’s Big-enders and Little-enders warring about which end to begin a boiled egg, but the real purpose of declarations like this is not to change the world but separate the pure in heart from the thought-criminals and to reinforce the collective identity of the former by presenting a common foe. Such tests are not nuanced; they are intended to divide, not grade. The American right has now totally adopted this old leftist habit. For the past decade, the Republican Party’s conservative activists have had a list as long as the Lord High Executioner’s. Complete opposition to abortion, to teaching evolution, gay marriage, to any tax increases at all, to any cuts in defence expenditure and most recently and (one hopes suicidally) to any controls at all on the sale or ownership of weapons of mass murder.

That many of these tests are mutually exclusive in the real world matters not one jot. The cynical swine who manipulate these issues are trying to mobilise donations, on the one hand, and a broad mass of activist nutters – “the wackos”, as one lobbyist described them in the case of Jack Abramoff, that, unusually, resulted in a six -year sentence for corruption. Abramoff’s lobbyists had enlisted the evangelical right, “the wackos”, to stop the extension of gambling to riverboats in the south, evoking the morbid fundamentalist sense of sin. But, in fact, the fundamentalists were duped into acting on behalf of the Indian tribes who wanted to maintain their monopoly on legal gambling and were prepared to pay Abramoff big dollars to do so.

 In the current context, the National Rifle Association invokes the United Nations as a threat to American sovereignty and gun-owners’ rights, not because there is any substance whatsoever for such allegations, but because it acts as an adjuvant in a vaccine, adding the conspiratorial fervour and energy of American xenophobia to the gun lobby’s efforts. Indeed, perhaps the only thing saving the UN from more such outpourings is that it is easier to harness the bile of the many Americans who hate Barack Obama because he is black – which is, of course, true – but also that they see him as a foreigner, a Muslim.

Last weekend was Martin Luther King Day in the US, as well as President Obama’s inauguration say in Washington DC. While both stand as a symbol of progress, we can be sure that the American media will not dwell on King’s real record as a democratic socialist, a supporter of unions and strikes and an opponent of the Vietnam War, let alone as the victim of FBI spying. That Americans celebrate such days is a sign of progress, but when you look at how many Americans believe three impossible things before breakfast, and even how the media lionise politicians who should really be in a padded cell rather than voting in the chambers of the US Congress, you have to wonder.
It would be difficult to pin down precisely the cause of this tide of irrationality that we hope has now reached a peak, but a major contributing factor has to be Rupert Murdoch and Fox News, which has succeeded in bringing into the mainstream views that had hitherto been regarded as deranged and outlandish. The good news is that, in the long term, enough Americans are dismayed enough by such ravings to turn out to vote against them. We can hope that the conservative ideologues have won the party but lost the country.

Sunday, January 06, 2013

Catskill Review Radio Shows!

Tonight 7 pm EST, WJFF, I interview Richard Lingeman about his book Forties Noir re era when New Deal became Cold War

29 December
Up on
Ian Williams talks to Jim Sterba about "Nature Wars" his book on the woods, and animals, returning and surrounding so many people


22 December This week Ian Williams talks to Scott C. Davis, publisher and author about Syria


15 December Ian Williams talks to Alex Marshall on how inorganic a market is!


8 December

Leonard Cohen's bio by Sylvie Simmons.


24 November

Ian Williams talks to John Dileo about his latest book for silver screen aficionados


17 November Up this week interview with Robin Lamont
about her book Wright for America  http://rcm.amazon.com/e/cm?t=rumasociaands-20&o=1&p=8&l=as1&asins=0985848502&ref=qf_sp_asin_til&fc1=000000&IS2=1&lt1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr

10 November https://www.dropbox.com/s/rflpa9l3dfio7jl/Hogeland2.mp3
Bill Hogeland on Founding Finance, on how the Tea Party and Left unite in error


3 November https://www.dropbox.com/s/jn80fl5bdy2rj5g/robbins.mp3
Charles Robbins praises Primary Colors, but points out that it is an outsider's view of politics... in "The Accomplice" we have an insider view since Charles worked on Tom Daschle's campaigns...
Up on audioport \http://audioport.org/index.php?op=program-info&program_id=54437&nav=&

27 October
Alyssa Harad on perfume for feminists! https://www.dropbox.com/s/b9mg7wpw892kirh/alyssa.mp3 “Coming to My Senses”


13 October

CRoB interviews former UN SG and Syria envoy Kofi Annan http://audioport.org/index.php?op=program-info&program_id=54231&nav=&


6 October
this week's Catskill Review of Books, Ian Williams talks to ex contractor in Balkans Albert Ashforth about his novel The Rendition, great thriller with authentic geopolitical background and tradecraft https://www.dropbox.com/s/o8eob8kv5zj2f5m/ashforth.mp3



29 September


this week’s Catskill Review of Books Features Steven Ujifusa about his book that reveals the industrial, political and economic history of the last century through the battle to build the SS United States.


22 September WJFF CRoB
https://www.dropbox.com/s/e5p3ryf0hr1y7tf/kraus.mp3 I interview Jerelle Kraus about her new book on censored Op Ed art from the NYT oped page -not to mention her meeting with Nixon!


15 September https://www.dropbox.com/s/8iix8ypwkpci4gx/hill.mp3
BDSM author Joey Hill discusses the genre and the effect of 50 Shades of Grey on publishing. family relations and the world!


8 September Up this week on https://www.dropbox.com/s/8iix8ypwkpci4gx/hill.mp3
This is repeat since Ian was rushed to hospital. Now out and catching up

But Madiline Miller is on tour since the prizewinning book is just out in paper back.

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Saturday, January 05, 2013

Ian Williams on Fiscal Cliff


Even English Speakers have the right to self determination!

 I declare war on trite nationalist/allegedly socialist sloganeering.