Quote
“Corporation, n., An ingenious device for obtaining profit without individual responsibility.”
From
“The inherent vice of capitalism is the uneven division of blessings, while the inherent virtue of socialism is the equal division of misery.”
News
On Tuesday the board of British chocolate manufacturer Cadbury recommended shareholders to accept the offer from US food giant Kraft – who need to borrow £7bn to pay for Cadburys. Chairman Roger Carr said the board did not feel guilty about selling Cadbury. “We don't own the company - the shareholders own the company and the board has a fiduciary duty [to recommend an offer] when appropriate value has been paid." Union leader Jennie Formby said the Cadbury workforce was shocked and angry at having been "sold out". She added: "This is a leveraged bid and Kraft will eventually have to repay the debt, meaning a great deal of uncertainty for the workforce in the UK and Ireland." Peter Cadbury, great-grandson of the company’s founder, stated, “I don’t think Kraft have made a very convincing case about whether they can run a business better. It’s being recommended purely on terms of price.”
This highlights one of the glaring failures of corporate capitalism: the gulf between the interests of the shareholders who legally own the company (most of whom seek only short term returns on their capital) and those of all the stakeholders whose livelihoods depend directly or indirectly on the business – employees and their families, suppliers, local businesses and the wider civic community.
The relational business approach seeks to reform shareholding by discouraging “absentee landlords”, increasing the involvement of shareholders in operations of the company, and aligning their interests more with the “front line” stakeholders.
Read on...
The Relational Business Charter which we are promoting takes a long, hard look at the present system of corporate capitalism – especially where it ends up undermining the common good – and recommends a radical alternative, the Relational Company. For further reading, we have prepared an excerpt from the draft document introducing the Relational Business Charter, which gives a good overview of the strengths and weaknesses of the limited liability company structure. You can download the article from our website here http://www.relationshipsglobal.net/Web/OnlineStore/Product.aspx?ID=36.
Walk the talk
If you are a shareholder in a company then find out when the AGM is this year and resolve to attend it. Consider how well the company is doing against the ten points of the Relational Business Charter and put a question to the chairman (the ten points of the Relational Business Charter are available to download from our website at http://www.relationshipsglobal.net/Web/OnlineStore/Product.aspx?ID=5)
The last word
From the Bible, Luke 19:22: “His master replied, 'I will judge you by your own words, you wicked servant! You knew, did you, that I am a hard man, taking out what I did not put in, and reaping what I did not sow? Why then didn't you put my money on deposit, so that when I came back, I could have collected it with interest?' “
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