Managerial Capitalism: Being and Becoming

At first glance, Friedrich Nietzsche’s pro-capitalist stance on private property and the process of accumulating profit (or wealth) may seem to extend a vote of confidence to the business manager as a type. After all, managers manage the private property of stockholders (which can include themselves) with a fiduciary duty to do so to increase shareholder value by maximizing profit. The notion of profit-seeking by maximizing revenue and minimizing cost is arguably too simplistic. Squeezing a workforce too much, for example, can backfire in the long term. Nietzsche was concerned about such a thing happening even though he claims that the vast majority of laborers must be kept to subsistence wages for culture to be possible. He castigates petty, short-sighted managers who do not look out for the spiritual and economic welfare of workers, and yet holds that those workers must be slavish in the sense of being exploited by employers so culture can emerge and be sustained by the rich. To be for such exploitation and yet against petty cost-cutting managers renders Nietzsche’s socioeconomic philosophy interesting as well as useful in terms of keeping a capitalist economy from being reduced to the mentality of its bottom-feeder producers. I first discuss the matter of exploitation and then turn to how Nietzsche addresses his wider socio-economic philosophy more specifically to human-resource management. Within the wider subject-heading of exploitation, very different approaches, or mentalities, to human resource management can be discerned. In dichotomous terms, there can be said to be a pathos of distance between enlightened self-interest and selfish, short-sighted greed.

The full essay is at "Managerial Capitalism."

Elon Musk’s Controversial Politics: Beyond the Financials

As U.S. President Trump signed his “Big Beautiful Bill” into law on July 4, 2025, Elon Musk, shareholder and CEO of Tesla, announced that he would create a new political party (or “group” in European-speak). Musk opposed the projected trillions of dollars that the bill would add to the debt held by the U.S. federal government, though, as CEO of SpaceX, he was fine with cutting a trillion dollars from Medicaid, which provides health coverage to the poorest of the poor, and from food assistance while the defense budget was augmented. Musk’s proposed “America” group would likely draw support from Trump’s “MAGA” base, rather than from moderate Republicans and any Democrats. Whether Musk was more motivated by breaking up the political duopoly of the two major parties, or groups, to increase the practical options for voters or to split Trump’s support and punish the Republican party, such controversial political involvement by a major shareholder CEO is without doubt risky business. This is not to say that CEO’s should not be active politically apart from business strategy, for even business managers are citizens and thus may feel compelled to become active politically. This is to be lauded especially if the motive is out of duty to repair or otherwise improve a political system.

The full essay is at "Elon Musk's Controversial Politics."

CSR and Corporate Governance Reform: An Opporunity for BlackRock as an Activist Shareholder

In 2019, BlackRock’s management and board publically fired two executives in the Hong Kong office for breaching company rules on dating subordinates. The firings demonstrated to employees that the company would enforce its employee policies and sent the message that employees would be “free to point out problems in the workplace.”[1] This would not be so extraordinarily significant but for the fact that BlackRock is the “world’s largest money manager with $7.4 trillion under management,” which enables the company, through the funds it runs, to be “one of the five largest shareholders in nearly every corporation in the S&P 500.”[2] So BlackRock “can cast votes and pressure boardrooms to effect change.”[3] The company would be hypocritical in using its power as a major stockholder to get managements to have and enforce good workplace policies if the company were not doing so itself. From the standpoint of self-regulatory capitalism in society, BlackRock could make a significant contribution far beyond improving workplace policies.

The full essay is at "CSR and Corporate Governance Reform."

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[1] Dawn Lim, Steven Russolillo, and Jing Yang, “At BlackRock, Public Firings, Overseas Probe Send Message About Office Misbehavior,” The Wall Street Journal, February 3, 2020.

[2] Ibid.

[3] Ibid.

Facebook’s Mark Zuckerberg: Power beyond Corporate Governance

Facebook’s Mark Zuckerberg and Sheryl Sandberg did not attend a committee hearing at Canada’s Parliament on May 28, 2019 in spite of having received summons from Bob Zimmer MP, the committee’s chair. Instead, Facebook sent its director of public policy and its head of public policy for Facebook Canada. “Shame on Mark Zuckerberg and shame on Sheryl Sandberg for not showing up today,” Zimmer said toward the end of the hearing.[1] For sending two representatives rather than themselves, Zuckerberg and Sandberg faced the possibility of being held in contempt. They had testified before the U.S. Congress, so by sending two representatives the two leaders of Facebook may have acted rather dismissively concerning Canada’s federal legislature. At the time, Zuckerberg had virtually unchecked power at Facebook, including over the other stockholders. From his perch, the power may have been going to his head; even after two years of user-privacy scandals, Facebook’s CEO and Chairman of the Board may have determined that summons from legislatures where the company was operating were beneath him. Such a mentality is dangerous for a person with autocratic control of such a large company.

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1. Donie O’Sullivan and Paula Newton, “Zuckerberg and Sandberg Ignore Canadian Subpoena, Face Possible Contempt Vote,” CNN.com, May 28, 2019.

Protecting Minority Stockholder Rights: On a Conflict of Interest at Revlon

The principle of majority rule is a staple of democratic theory. Typically the victor of a close election is quick to proclaim that “the people” have spoken. That “the people” corresponds to 51% of those who voted is beside the point. What about the 49% who voted against the victor? What about the minority’s rights? In the U.S. Senate, the fact that it takes 60 out of 100 votes to end a filibuster means that a large minority can halt a majority’s bill. In the European Council, the qualified majority rule means that for a bill to pass, the states in the majority must be at least 55% of the total number of states and must have at least 55% of the E.U.’s population between them.  A large minority can therefore stop a small majority. In both of these “intergovernmental” bodies, the implication is that 51% of a vote is not as significant as the principle of majority rule suggests. What about the rights of a minority of shares of stock in corporate governance? When a majority stockholder has control of management, the interests of the minority stockholders can be shirked. This is particularly true when a majority stockholder proposes a going-private transaction with the aid of management.

The full essay is at "Protecting Minority Stockholders."

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1. Peter Lattman, “To Perelman’s Failed Revlon Deal, Add Rebuke From S.E.C.,” The New York Times, June 14, 2013.

2. Ibid.

3. Ibid.

4. Ibid.

5. Ibid.

6. Ibid.

Is Corporate Governance Anti-Democratic?

Assuming all the votes cast in an election are accurately tallied, the pronouncement of the winner would seem to be straight-forward. What it means to have won, however, is considerably more complex. Specifically, is winning getting over 50% of the vote, or should a mere plurality of, say, 38% suffice? It could be argued that a super-majority of 60% or two-thirds is necessary for there to be a discernible will of the people behind the winner. To claim that 51% represents the will of the people seems a bit of a stretch, since almost half of the voters cannot be considered to be of that will. Typically, much is read (or projected) into the 1% over the 50% in terms of a mandate. All of a sudden, 51% of the voters become “the people.”  Certainly a winning plurality of 38% cannot be said to stand for or represent the will of the people, for 38% is a minority in the total votes cast. Yet in Delaware’s corporate law, which is binding for most American corporations, a mere plurality is sufficient for a candidate to be elected to a board of directors. While this arrangement is not ideal, it is a legitimate basis even if some stockholder activists beg to differ.

The full essay is at "Corporate Governance as Anti-Democratic?"

Steve Jobs at Apple: A Visionary

Typically as a company transitions from an enterprising, creative new venture to a large organization to be managed, a staid CEO replaces a visionary founder. In the case of Steve Jobs at Apple, the very nature of the man’s vision was not only inherently at odds with the status-quo underpinning of a large organization with a budget, but also essential to the company’s business model. Hence, the company, including its shareholders, paid a price for years for jettisoning Jobs. The film, Jobs (2013), is centered on the distinctiveness of Jobs’ vision. Although the film also hints at why this distinctiveness is such that the company would (and did) lose as a large organization after making the typical founder-to-CEO transition.

The full essay is at "Jobs."

BP's Criminal Guilt in the Deepwater Horizon Oil Rig Disaster

More than two years after the worst oil disaster in U.S. history, BP agreed in 2012 “to accept criminal responsibility for the . . . disaster that killed 11 workers.” What does it mean for an association to “accept criminal responsibility”? The notion seems unwholesomely anthropomorphic, if not chimeric in nature. Taken even just practically, holding a corporation itself criminally responsible may not be make sense, even as a deterrent. I contend that the notion of criminality applies only to human beings, whereas civil charges are suitable for associations including corporations.

The full essay is at "BP's Criminal Guilt."

Executive Compensation (Part II): Paying Failure

In late September 2011, Léo Apotheker was fired after 11 months as CEO at Hewlett-Packard. As a reward, he walked with $13.2 million in cash and stock, in addition to a sign-on package worth about $10 million, according to the New York Times. A month earlier, Robert P. Kelly received severance worth $17.2 in cash and stock when he was fired as CEO of Bank of New York Mellon. Even his clashing with board members and senior managers did not obstruct his nice severance package. A few days later, Carol Bartz was let go as CEO of Yahoo with nearly $10 million in spite of the company’s poor performance. Back in April 2011, John Chidsey, the CEO of Burger King, had departed with a severance package worth almost $20 million in the fact that McDonalds had been outcompeting Burger King. Baxter Phillips, the CEO of Massey Energy, got a package worth over $34 million in spite of “presiding over a company barraged with accusations of reckless conduct and with legal claims stemming from one of the deadliest mining disasters in memory,” according to the New York Times. Unfortunately, the list goes on and on. Is this a system of pay-for-failure? Moreover, do chief executives, who seem to outward appearances to be almost exclusively motivated by what they can get in additional compensation, have too much leverage over boards, and thus over even the owners as well? If so, is corporate governance itself severely broken? I answer in the affirmative.

The full essay is at "Executive Compensation: Paying Failure."

Eric Dash, “The Lucrative Fall from Grace,” New York Times, September 30, 2011. 

Hedge Fund Set to Hack Nestlé Up: A Case of Sensationalistic Over-Kill

Does the fact that an earnings-per-share figure has not meaningfully improved over, say, five years justify an overhaul pushed by a hedge-fund activist investor?  Put another way, is a steady earnings-per-share tantamount to failure? Especially for an established company, steady numbers do not evince bad performance. An airline would only foolishly fire a pilot for not climbing once having attained a cruising altitude. Maintaining such an altitude during a flight is hardly a reason to turn a plane around or set it in a radically different direction. 

Dan Loeb of Third Point. Relax, Dan, Nestle is not on a nose-dive.

The full essay is at "Hedge Fund Activist."

Apparent Gains in Corporate Governance Accountability as the U.S. Economy Shifts

In 2016, Sacred Heart University purchased G.E.’s headquarters in Fairfield, Connecticut for $31.5 million. Gone were the Persian rugs and lavish artwork. The property acquired included the “Guest House,” the company’s 28-room hotel “to serve visiting executives and others, with no expense spared on the parquet floors, wood-burning fireplaces and a Steinway piano.”[1] Jack Welsh oversaw the ornate construction, leading to the obvious question of just what his sense of fiduciary duty to the company’s stockholders was. An artificial distinction between managers—only some being styled “executives”—was doubtless behind the luxuriant excess only for those certain employees “in the club.” From the standpoints of a board and its stockholders, “executives,” managers, and other employees are all employees. Why then should some of them be associated with luxury while they are at work? Historically, the aristocratic luxuriated precisely because those people didn’t have to work, and more importantly, they viewed work (and even their own money) as not worthy of much attention—there being finer things in life. “Executive” employees are not aristocratic, for they labor even when they could live off their accumulated wealth and pursue loftier aims, such as aiding humanity, furthering knowledge, or engaging in the arts with an eye toward advancing civilization. Bill Gates got this memo; Warren Buffett did not.

The full essay is at "Corporate Governance Accountability."

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[1] Nelson D. Schwartz, “The Decline of the Baronial C.E.O.,” The New York Times, June 17, 2017.

Bank of America Board Ignores a Binding Resolution: Fiduciaries Seizing Power from Shareholders

Corporate board directors have a fiduciary duty to act in the shareholders’ financial interest. What if a board’s directors think they know better that the stockholders as to their interest? In such a case, the directors would be acting like elected representatives who vote contrary to the wishes of their constituents for their own good. While valid from the standpoint of representative democracy, I’m not sure the principle has legitimacy in the corporate context, wherein property-rights are being represented. Simply put, an owner gets to decide how his or her wealth is used, within legal parameters of course. The case of Bank of America’s board may suggest that directors essentially work for their managements while being shamelessly dismissive of even binding directives from the stockholders as a group.

The complete essay is at “Corporate Governance at Bank of America.” 

The man of the hour. Brian Moynihan, Chair and CEO of Bank of America as of 2015. His power exceeded even that of the stockholders, whose concentrated wealth he managed. Lest it be maintained that a CEO with such power optimizes corporate earnings, consider that his predecessor, Ken Lewis, had the bank purchase Countrywide, whose fraudulent mortgages played a vital role in bringing about the financial crisis of 2008. Perhaps CEO/chair duality is of value simply in reducing a corporation's systemic risk. Hence, Congress may legitimately intervene.(Simon Dawson/Getty Images)

Property Rights in China: On the Separation of Ownership and Control in the Stock Market

It is too simplistic to say that economies around the world converged as capitalistic after the collapse of the Soviet command-and-control economy. Even the notion that China’s communist party has embraced capitalism does not do justice to the ways in which China’s capitalist system is unique. This became particularly apparent in early July 2015, when the bubble burst in the Chinese stock market.

The full essay is at “Property Rights in China.”

Stockholder Activism at DuPont: A Conflict of Interest for Management

In American corporate governance law, the business judgment rule gives management expertise the benefit of the doubt over stockholder proposals. Compared with executive skill, they look rather populist and thus potentially irrational in nature. Nevertheless, with the rule chaffing up against the property-rights foundation of corporate capitalism, the managerial prerogative can be said to be dubious. Indeed, a strict private-property basis justifies displacing the default profit-maximization mission for a given corporation. Alternatively, stockholders may want to use their concentrated, collective wealth for other purposes, such as to alleviate hunger. Once enough profit has been made for the business to be sustained for another year or two, any additional surplus would be spent on food pantries, for example, rather than going out as dividends or being retained by the corporation. Because managerial skill is premised on the profit-maximization goal and its associated strategies, corporate executives intrinsically resist alternatives proposed by stockholders. The managers face a conflict of interest in providing their recommendation for stockholders. Even when the proposal assumes profit-maximization but differs from a current strategy (i.e., adopted by management), a conflict of interest exists should the management seek to provide a recommendation for the stockholders. In this essay, I use the activism of Trian Fund Management at DuPont to illustrate this point.

The full essay is at “Stockholder Activism at DuPont.”

Mergers and Acquisitions: What about the Stockholders?

Why do companies merge and acquire other companies? Synergy is the textbook answer. Typically, the stockholders of the target company see an appreciation in the value of their stock, while stockholders in the initiating firm see a downtick. The reason why is simple: corporations typically overpay. The value-added of the anticipated synergy must be greater than not only any overpayment, but also the intangible costs in aligning the corporate cultures. Yet another factor—an opportunity cost, really—is frequently overlooked: that of whether the extra cash on hand should be returned to the stockholders as dividends.

The complete essay is at “Mergers and Acquisitions” 

Making Business More Interesting: Beyond the Jargon and Figures

From a historical perspective, I suspect that what “counts,” or is recognized, as discourse on business has consecutively narrowed. An enterprising scholar in the field of business and society, which itself has narrowed to managerial tools and ideological demands (under the subterfuge of knowledge), might compare the media’s coverage of business firms beginning to sell electricity, the telephone, and the auto-carriage (i.e., automobile) in the early decades of the twentieth century with reports a century later on firms bringing out life-changing products like smartphones and other applications of computer technology. Not having been around when electricity was making houses brighter and telephones as well as cars were fundamentally changing human interaction and mobility, people following the business news on Facebook, Twitter, Apple, Google, and Microsoft do not have the historical perspective necessary to assess how broad or narrow the coverage is. 

I contend that what is considered business news (and discourse) is artificially constrained, in that coverage is biased toward the companies themselves (most particularly in CEO antics and financial numbers) at the expense, or opportunity cost, of attention on exciting new products. Put another way, the public discourse on business need not be so reductionist. The trajectory is not good for business or society. I contend that broadening (i.e., rather than replacing one media obsession with another) the coverage in business news to include, and, indeed, emphasize, substantive information on, as well as discussion of, the exciting new uses and wider implications of the companies’ respective technologically advanced products would render business news as well as business itself much more interesting, especially to people in the wider society. In this essay, I sketch how a product-centric approach would look in the business media; hopefully, the sheer difference between this alternative and the status quo reporting will provide a sense of how much journalistic discretion is involved in what we watch and read in business news.

CNBC and Fox Business News provide much material for analyzing the business media, and can be taken as illustrative of the default that had taken hold by the 2010s. The devil is in the details, so I want to concentrate on a particular example and reason inductively to generalize to the business media overall.

An interview taking place on CNBC. The choice of questions may be more important than the answers. (Image Source: Inside Cable News)

On “Squawk on the Street,” a program on CNBC, the anchors interviewed Harvey Spevak, the CEO of Equinox (a company in the fitness industry), answered questions on January 17, 2014. I want to focus on the importance on the questions. One of the show’s anchors asked Spevak about his company’s plan to offer genome analysis as a service to customers who would like to know how they respond generally to exercise. Rather than follow up with a question to illicit what customers would learn about the way they react to exercise, the journalist asked if the service was “just a marketing gimmick.” I submit that probing the service if only to assess its staying power with consumers would have been more useful to not only investors and stock analysts, but also people who would not be interested in watching and hearing a cacophony of numbers presumptuously assuming the high ground as “king of the hill” of business news.

One implication from the interviewer’s choice of follow-up question is that investor interests, assumed to be exclusively bottom-line financial, trump consumer and entrepreneur (or even competitor) interests. Such reductionism is unnecessary, and the numbers orientation may not actually be in the interests of the investors and financial analysts, not to mention CNBC’s ratings.

The interview then turned to company’s foray into wearable fitness technology. Here, the interviewer had little interest in making the products concrete for prospective customers and the wider public; he was satisfied with the Spevak’s vague description, which ended with, “It’s science.” The journalist made the choice to follow-up instead by asking what profits the CEO expected the company would make on the wearables, and, moreover, whether an IPO might come anytime soon. Potential investors (and stock analysts) would be better equipped to evaluate a future IPO were the CEO to have discussed what how the wearables could benefit users (i.e., what the products can do) as well as how the products might change our daily lives and society itself. The anchor then turned his guest to the subject of online advertising, hence inadvertently feeding the obsessive mentality in the American media generally by treating advertising as an end in itself rather than a means of making potential and even existing customers aware of products and services.

All too often, information and public discourse on products a leap ahead technologically (and hence seemingly unfathomable) are relegated to “print” reports of product announcements, such as of Google’s new contact lens that measures glucose levels. People with diabetes would quite naturally be very interested in how the new product would likely impact their daily lives. A huge segment of potential viewers and readers could be drawn in by any media outlet willing to stay on the announcement rather than run to vague considerations of profitability and stock charts.

Does not the true value (and significance, not to mention the excitement) of products coming out of leaps in technology or hitherto unrealized applications of existing technology lie in the stuff we can do with the new toys? As a writer, I get excited when I come up with a novel point or perspective to share with others because I have experienced what it feels like to have my perspective “opened up” from reading a unique piece. I am not thrilled in reading about grammar or composition tips, on the other hand; I do such “mechanical” reading as a means of improving my ability to communicate to readers. 

Public discourse on business too often obsesses on the means—even taking them to be ends in themselves­. Consequently, interest is typically confined to a narrow segment (i.e., the financial wonks). Ironically, Wall Street would be better served with the media giving more attention to the new products and their societal implications, with the expected financial consequences being secondary rather than excluded in yet another manifestation of tunnel vision. Reports and commentary on novel products themselves (as well as innovative ways of business) do indeed fall within the domain of business discourse. In fact, I would say the reorientation is more in line with the true significance of business (i.e., making and providing products that consumers want to use). Tapping into this core of business, while still attending to the financials, would, I suspect, attract a broader array of viewers and readers in the wider society beyond the business world. As an added bonus, business practitioners, investors, and even stock analysts might find their own interest piqued. A stock analyst excited as much (or more) about a novel product as charts and figures may do a better job in assessing a company’s value, and thus likely stock trend.

Of course, in order for more of the general population to realize that the true significance of business is actually more interesting, the business journalists would have to wean themselves and their interviewees off the snazzy jargon, nearly devoid of any real meaning and yet ubiquitous in the business world. The artificial excitement over such words or phrases as “champion,” “coach,” “growing leaders,” “driving” (not as in driving a car), “drivers,” and “leveraging” (beyond its oversold application to debt) is misguided in that the obsession and related excitement (out of vacuous boredom?) distract everyone from the true font of excitement in business. Additionally, the weirdness in both the sheer obsessiveness on particular words—flavors of the month—and the misuses themselves, and the artificial narrowing of what counts as business that enables knowing and enjoying the “language” to function as the passkey keep people outside the business world from becoming excited about business rather than laughing at its inhabitants’ discourse. Perhaps the practitioners and journalists who play in the business world figure, quite unconsciously of course, that business as they understand it is not really very exciting, and, therefore, that few if any people in the wider society would be likely to get excited about business anyway.

Starbucks Takes a Hit for Supporting Gay Marriage

In January 2012, Starbucks joined Microsoft and Nike in publicly supporting the same-sex marriage bill in the U.S. state of Washington. Two months later, the National Organization for Marriage began a “Dump Starbucks” boycott as a result of Starbucks' support of gay marriage. David Barton, whose sermon on May 19, 2013 on “pious caffeine consumption” was posted on the internet, said, “The question is, ‘Can a Christian give money to a group he knows will use it to attack what God supports?’ . . . You can’t drink Starbucks and be Biblically correct on this thing. It’s just a real simple principle.”[1] Barton had earlier likened being gay to smoking and gay marriage to dogs marrying horses. In spite of these rather extreme claims, the boycott gained some traction. At the next Starbucks’ stockholder meeting in March 2013, Tom Stauber, a stockholder, suggested that the company’s sales and earnings were a “bit disappointing” in the quarter after the boycott had begun precisely because of the issue. Whereas the stock and dividends had risen 38% from October 2011 to September 2012, the rise was only 7.6% from March 2012 to March 2013.[2]  If indeed the causal attribution is correct, then it can be asked whether the management (and/or board) of a company taking a political stand on a controversial societal issue that is not expected to save the company money and in fact could result in lost revenue breaches the fiduciary duty to the stockholders unless a majority of shares are voted in support of the position.

Starbucks typically relies on young adults to both work in and manage the stores. Even an excellent vetting process in hiring does not mean that effort is not needed to fortify the mechanism of accountability.  Source: wikimedia.  

The full essay is at "Starbucks: A Shaky Management Wades into Social Issues."

See also, Bucking Starbucks' Star, available at Amazon.

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[1] Meredith Bennett-Smith, “Christians Can’t Drink Starbucks Because Company Supports Gay Marriage, Evangelical Says,” The Huffington Post, June 3, 2013.

[2]Aaron Smith, “Starbucks CEO Holds His Ground on Gay Marriage,” CNN Money, March 28, 2013.

Jamie Dimon Wins Stockholder Vote: Exploiting Conflicts of Interest Undercuts Fairness

Chairman of JPMorgan since 2006 and CEO a year longer, Jamie Dimon faced down a daunting stockholder vote on May 21, 2013 on whether he should be allowed to retain both roles. Despite the bank’s $6.2 billion trading loss, deeply flawed risk-management oversight, and “credibility issues” with regulators, only about 32% of the votes cast were in favor of the nonbinding resolution that the chair and CEO jobs be separated. Interestingly, not only does the chair/CEO duality have an inherent conflict of interest because part of what a board (including its chair) does is hold management (including the CE) accountable, the means by which the pro-duality side campaigned also included conflicts of interest. I cannot help but wonder whether Jamie Dimon, his immediate subordinates, the bank’s board directors and even the stockholders who altogether voted a supermajority of shares in support of Dimon’s two roles were negligent ethically in failing to even recognize the institutional conflicts of interest involving Dimon and the board. To the extent that recognition existed, permitting the conflicts to exist and in some cases knowingly exploiting more than one at a time are even more squalid than merely being oblivious to them. To the extent that structural conflicts of interest were enabled through the campaign and in the election results, JPMorgan Chase can be likened to a house of cards. This does not bode well for the financial system and broader economy to the extent that the largest American bank holds systemic risk (i.e., “too big to fail”). I look at the campaigning first, as doing so will lead us directly to the main conflict of interest that is at issue here.

 Jamie Dimon, CEO and Chair of JPMorgan Chase.  The duality of roles can benefit him both personally and institutionally. NYT

The full essay is at "JPMorgan: An Unethical Monstrosity?" and at
Institutional Conflicts of Interest, both available in print and as an ebook at Amazon.

Bad Directors at HP: Like Guests Who Overstay?

Lest it be thought that Congress ignoring the business lobby would result in laws capable of reforming corporate governance in the U.S. in the interest of stockholders, even putting the “objectionable” stuff back into legislation may not be sufficient. In this essay, I look at the proposed elimination of plurality voting in the original Dodd-Frank bill from the perspective of the case of HP. Put simply, the question is whether it would have made any difference had the proposal been retained in the bill.


The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.

No Guilt at Citibank

In the days leading up to Labor Day 2012, Citigroup announced that the bank would pay $590 million to settle a class-action lawsuit by stockholders who contended that the bank’s management as well as some directors had misled the stockholders about the bank’s exposure to subprime mortgage debt in 2007. The bank had used improper accounting practices to show an inflated asset base. The shareholders claim that the bank assured them that it had sold billions of dollars in collateralized debt obligations based on subprime mortgages. However, the bank had actually guaranteed the securities against any losses. To further disguise the risks to the stockholders, the bank moved the guarantees to separate entities. Unfortunately, the settlement is insufficient as a means to thwart banks such as Citibank from misleading investors. Legislators might want to look at two reforms in particular.

The full essay is at "No Guilt at Citibank."

See: Cases of Unethical Business, available in print and as an ebook at Amazon.com.