Wednesday, August 14, 2013

Robert Monks takes on the corporate drones

My weekly post on the s+b blog is about a new book from a guy I've long admired, Robert A.G. Monks:

In “Drone Corporations,” Self-Interest Prevails
In Citizens DisUnited: Passive Investors, Drone CEOs, and the Corporate Capture of the American Dream (Miniver Press, 2013), Robert A.G. Monks sets the tone right off the bat by recalling the time he stood up at an ExxonMobil annual meeting and addressed CEO Lee Raymond as “emperor.” Indeed, Monks has long been a highly vocal gadfly and leading activist when it comes to corporate governance. 
Here, he argues that corporate governance is more important than ever because of two relatively recent developments. First, corporations have ascended to levels of unprecedented power in the United States, thanks in large part to legal rulings. The Supreme Court’s decision in the 2010 case Citizens United v. Federal Election Commission, for example, removed virtually all limitations on corporate political spending—a “grotesque decision,” rightly judges Monks. Second, the leaders of the largest and most powerful corporations in the U.S. (ExxonMobil, IBM, and General Electric top the list) have never been less accountable to shareholders. This is because of weak boards and the movement of large ownership positions to passive institutional investors, among other things. The result is “drone corporations,” in which “manager kings” have free rein to pursue their own self-interest. Monks puts more than half of the Fortune 500 among their the rest here

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