Wednesday, May 4, 2011

Breakdown of Democratic Capitalism

Question: what factors are behind the breakdown of democratic capitalism? Bob Monks responds "Since Citizens United, CEOs have, in effect, control over the rules pursuant to which the corporation is supposed to function." April 27, 2011

May 4, 2011 in CEO power , CEO Pay , Campaign Finance , corporate governance , Citizens United  |  1 comment  | 
Related Content
Business Power Over Government
Power Corrupts
Letter to Newsweek regarding CEO pay
One Year Later: The Long Shadow of Citizens United
Citizens United and Corporate Governance

Post a comment

Comments

Posted by Mohamed Ebrahim on May 4, 2011 at 5:10 PM
I agree and understand almost all of the arguments put forward, however corporations pay the highest amount of taxes, but they do not get the right to vote, hence the lobby and political party contribution is their proxy for a voice in the Political governance of their Country, to ensure that business interest are also taken care of in the government\'s decision making process. The challenge at hand is the CEO and to a lesser extent the Board of Directors get to decide which party to fund, and not the owners of the Corporation. This is coz the actual beneficial owners either as individual shareholders, contributors to company retirement plans and buyers of collective professionally managed investment products (mutuals, unit trusts etc) are far removed from the resource allocation process. This is due to layers of stwardship of company, financial vehicle chosen, the institution which owns the finacial vehicle chosen. It is part of the capitalist process, which has its benefits but to get these benefits a price has to be paid which is the cost of monitoring.
Copyright 2014 by Robert A. G. Monks