Then you’ve got the Corporate Politically Correct (PC) overlay to consider. Companies who used to consider their shareholders as their prime stakeholder now have numerous so called stakeholders with even suppliers who tender for contracts being considered as stakeholders. This situation somehow in its entirety evokes the feeling of creeping socialism; no real skin in the game but having an influence on decision making. More recently of course the diversity argument, which although when viewed from a holistic perspective has significant merit, has been captured and promoted as a gender equalisation program akin to social engineering.
Within this mass of structured and organisational mayhem which by its very nature forces all involved to bow down before the alter of mediocrity the one voice that is lost and is being gradually muted by so called progressive movers and shakers is that of the investor. Can you think of any legislation or even knowledgeable debate around the concept of providing investors with more influence over company’s decision making processes or input associated with determining future strategic direction? What about investors taking back the ability of making boards and their appointed directors more accountable for their commercial behaviour? How about some legislation around the collective board and individual director’s performance being mandated as having to be published in the annual report? What about boards being made to provide quarterly confidential reports on strategic issues to shareholders?
The point that I’m making is that gradually but surely investor rights are being eroded, not by taking away any of their historic rights but by moving the pendulum and balance of accountabilities and responsibilities inherent in the business model more towards the boards of directors and the executive. When was the last time investors rights were actually improved so that they had direct input into the strategic direction that companies they had invested in were taking? We only have to look at the lack of any serious debate and discussion on the various business forums regarding investor rights to realise that the importance of investors to the well being of the commercial world is simply not a sexy or hot enough topic to be deemed worthy of exploring. The current rise of investor agitation will only increase if changes and a rebalancing of responsibilities and accountabilities aren’t addressed between those who lead and manage business behaviour and the investors whose wealth is at risk.
It’s interesting to note that at present the private company sector is awash with investors. It hasn’t escaped notice that the logic behind this shift from publicly listed companies to private company investment has been influenced by investors having a closer connection and influence on private company activities than is possibly in the publically listed sector. Surely this is a signal that there is need for some reform to ensure investor expectations and requirements are listened to and changes made where ever possible. Remember without satisfied investors we won’t have any sustainable competitive market nor witness any visionary growth in our commercial markets.
...if one stands back and looks at the umbrella of rules and regulations that companies and boards now operate under its almost akin to the business wearing a corporate straight jacket with complete freedom to operate being neutered.