The New Capitalists: How Citizen Investors Are Reshaping the Corporate Agenda.The New Capitalists: How Citizen Investors Are Reshaping the Corporate Agenda. By Stephen Davis, Jon Lukomnik and David Pitt-Watson. Harvard Business School Harvard Business School, officially named the Harvard Business School: George F. Baker Foundation, and also known as HBS, is one of the graduate schools of Harvard University. Press, 289 pages. $29.95 [ILLUSTRATION OMITTED] A central thesis in this ambitious and well-presented book is that tycoons and their allies no longer control corporations, but "citizen investors"--shareholders, employees, 401(k) holders--do. And these new investors are intent on companies doing good, as well as succeeding economically, treating workers and suppliers fairly and enduring the organization does no "collateral damage collateral damage Surgery A popular term for any undesired but unavoidable co-morbidity associated with a therapy–eg, chemotherapy-induced CD to the BM and GI tract as a side effect of destroying tumor cells " in its operations. Sounds a lot like socially responsible investing Socially responsible investing describes an investment strategy which combines the intentions to maximize both financial return and social good. In general, socially responsible investors favor corporate practices which are environmentally responsible, support workplace diversity, , which clearly is making inroads inroads Noun, pl make inroads into to start affecting or reducing: my gambling has made great inroads into my savings inroads npl to make inroads into [+ at a lot of companies. But is this new ownership really overt today? Institutional shareholders like mutual funds, hedge funds and the like remain far more interested in a company's earnings than its leanings, and shareholder-instituted challenges to unresponsive managements are still routine events. While the authors argue that this shareholder-instigated "civil economy" is now a reality, it seems a bit early to proclaim its flowering, especially in the U.S. Yes, as they point out, a challenge by Catholic nuns to General Electric Co.'s environmental policy had a dramatic result: a strong proxy vote Proxy vote Vote cast by one person or entity on behalf of another. for the nuns' resolution later persuaded GE's CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Jeffrey Immelt, to launch its "ecoimagination" theme and publicize dramatic goals on reducing emissions. And, a campaign by Hermes, a British pension fund, did successfully persuade BP plc to swap assets out of a politically repressive state, Myanmar. But, as the authors also observe, these changes--many about empowering the "little guy"--are gradual and often grudging. "Shareholder democracy" is still more dream than reality, especially when it comes to ideas like allowing shareholders to nominate directors and have them voted upon against the company's own slate, using the same proxy materials Proxy Materials Documents regulated by the Securities & Exchange Commission in which a public company outlines its methods and procedures. These documents are used to inform shareholders and solicit votes for corporate decisions, such as the election of directors and other . It's telling that many of the blurbs for the book come from noted shareholder activists and ethics arbiters like Robert Monks, Charles Elson and attorneys Ira Millstein and Lucian Bebchuk. While articulate and idealistic, The New Capitalists reads more like a position paper than the result of observation. Whether it's an accurate harbinger of things to come remains an open question. |
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