Modern corporate monsters
Glenwood Springs, CO Colorado
We have allowed to grow among us, in fact to take us over, “modern corporate monsters.” – Robert A. G. Monks
No wild-eyed radical, Robert Monks is a corporate lawyer with a long and distinguished career, first serving various corporate interests, then acting to protect pension holders as an executive of ERISA (Employee Retirement Income Security Act), the government agency that insures large employee pension plans. And most recently he founded ISS, which advises large institutional investors.
Mr. Monk’s long career has ended in a book, “CORPOCRACY,” which is a detailed explanation and description of how corporations and their lawyers have managed to disempower shareholders, entrench management, free themselves of obligations to their workers, and evade any government oversight.
As he points out, there is now really no countervailing force strong enough to stand up to these modern corporate monsters. The government and all its agencies are composed of politicians and bureaucrats beholden to corporate money or who have even spent their careers promoting corporate interests. Unions are weak, and the rest of us are either brainwashed by the corporate propaganda spewed by the corporate-owned media or just faint voices crying in the wilderness.
Even those shareholders who would like to make a difference find themselves powerless. As Mr. Monk says, “the reality is that shareholders do not elect directors (of corporations) in any sense beyond the ritual of being sent ballot cards on which are placed the same number of names as there are vacancies to be filled. Those names are provided by a committee of the corporation’s existing directors and there is no record of their ever nominating anyone not approved by the existing CEO.”
In effect, each corporation is governed by its own Joseph Stalin, because that is exactly the way Stalin governed the USSR.
Anyone whose name is not on the corporate ballot must, at his own expense, send another ballot to the shareholders and, unbelievably, it actually requires time consuming and expensive litigation to force the corporation to provide such an outsider with a list of shareholders. When Monk himself asked the board of Sears for a shareholder list, he was sued by the company.
The word on Wall Street is: “If you disagree with management, hold your nose and sell your stock.”
In the rest of the industrialized world it is very different. Under British law, for example, it only takes 10 percent of the shareholders to compel a corporation to hold an immediate general meeting at which all the Directors are subject to immediate replacement by a vote of those present.
The main reason institutions, whose pension and/or endowment funds own large amounts of stock in these corporations, have not put up any real fight to regain some say in their management is simply their own self interest.
Universities are now very dependent on corporate funding to carry on their research and other activities. And the managers of pension funds are afraid of losing their management contracts, which are dished out by the corporations whose funds they manage. It is an incestuous and vicious circle.
So the fact is that the United States today, and through the power of the U.S. government much of the world, is literally ruled by a gang of self-perpetuating CEO plutocrats who, in the words of none other than arch-conservative Milton Friedman, cannot be ethical because the corporation’s only responsibility is to make a profit.
Change will require two big and difficult things. The first is amending the Constitution to declare that corporations are not people and have no free speech or other rights guaranteed by the Constitution. Only after that is done, can the second be accomplished, namely congressional passage of real campaign spending limits that will turn control of our government back to real people, where it belongs.
– “What Do We Really Want?” appears on the second and fourth Thursdays of the month. Mary Boland is a retired teacher and journalist, a proud grandmother, and a longtime resident of Carbondale. Follow her on twitter@grannyboland.
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