Why Business Must Shift From Value Extraction To Value Creation forbes.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from forbes.com Daily Mail and Mail on Sunday newspapers.
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A few years ago, at a risk-management conference for big-wave surfers, I witnessed a heated debate over the latest innovation: an inflatable vest that could prevent drowning if a surfer wiped out. The vest was a technological marvel that had taken years to develop. Two vendors made the product: Patagonia, which made a black vest; and Quiksilver, which made a red one.
The crux of the debate was that inexperienced surfers who used the vest might feel emboldened to take undue risks, harming themselves and potentially others. Patagonia’s announcement that it would sell the vest only to experienced surfers brought lots of closed-eye head-nodding among the tanned, fit, and flip-flop-wearing surfers. That crowd fiercely disapproved of Quiksilver, which said that it would restrict the number of stores carrying its vest but would be more liberal about whom it would sell to. One well-known surfer said to me, “You see these guys out there on the waves in the
There is a link between active ownership and strong governance. Benjamin Graham, widely known as the father of value investing, recognised this as early as the 1930s, when he said: “The choice of a common stock is a single act, its ownership is a continuing process. Certainly, there is just as much reason to exercise care and judgment in being a shareholder as in becoming one.”
Retail investors access equities directly, or through mutual funds. For those opting for the former, active ownership may be limited to attending shareholder meetings and voting in resolutions in an informed manner.
But for an increasing number of retail investors, who access equities through mutual funds, the responsibility to act as an active owner falls on the mutual fund, on behalf of their investors.
Harvard Law Professor Warns Nasdaq s Proposed Board Diversity Rule Would Harm Investors | Allen Matkins jdsupra.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from jdsupra.com Daily Mail and Mail on Sunday newspapers.
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A new study shows that the top five executives of major corporations pocketed 15 to 19 cents of every dollar their companies gained from two recent tax cuts. The paper, by Eric Ohrn at Grinnell College, should be a really big deal.
The basic point is CEOs and other top executives rip off their companies. The officers are not worth the $20 million or more that many of them pocket each year.
This is not a moral judgment about their value to society. It is a simple dollars-and-cents calculation about how much money they produce for shareholders. The piece suggests that it is nothing close to what they pocket.