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Thomas Kostigen's Ethics Monitor

Dec. 18, 2009, 4:04 a.m. EST · Recommend · Post:

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Corporations wake up to water safety, supply

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GM totals Saab

By Thomas Kostigen, MarketWatch

SANTA MONICA, Calif. (MarketWatch) -- Profits are good. Bonuses can even be good. But I fear a new set of principles that frowns on monetary success is making its way into the world.

We should be celebrating the financial institutions that already paid back their government loans -- taxpayer money at the end of the day -- and are now reporting big profits. We shouldn't be castigating them.

It's a shame to see a government trying to claw its way back to exert pressure or influence on the way in which companies operate or compensate. We should be questioning the deals that were made and the dealmakers who made them rather than scapegoat the profitable results. One is whining. The other is smart business.

Water, more than land or security, is the crux of the conflict between Israelis and Palestinians, WSJ's Martin Himel reports.

If there are issues, shareholders should take them up. And if shareholders haven't learned by now that they have power and rights to create more ethically managed companies then I don't know what type of education will solve things. It certainly shouldn't be government's job to continually parent investors and companies. Yet that is exactly what is happening.

There are myriad questions of corporate malfeasance related to the downfall and failings of institutions associated with the recession, but where are the questions of shareholder accountability in all of this? There is a third prong of responsibility that hasn't been accounted for: the investors and proxy investors who were obviously asleep at the wheel or culpable in the wicked financial machinations that resulted in arguably the biggest economic downturn in history.

It's a lot easier to blame Wall Street and a relatively small group of corporate executives than seas of shareholders. But we all need to own up and take back control.

Government is instilling fear into the hearts of Corporate America, so much so that taking bigger business risks in order to gain bigger profits is a strategy shied away from, if not entirely shunned, these days. By example, banks aren't lending as much credit as they could (and should). Lending is risky business. But institutions are damned if they do and damned if they don't.

On the one hand, businesses taking more risks are chastised for doing so (or even for paying more to retain talent). On the other hand, businesses are chastised for not taking enough credit risks. Inevitably, risk is just that and there will be downside.

We cannot become a fearful world of capital market aversion reliant on government say-so. We need to get tough, get strong, and take responsibility for our own dollars. The only way we will flourish economically is if transparency holds, and shareholders stake their claims by demanding it.

This is why I believe the term "stakeholder" should replace "shareholder."

The government has lost its stake in the businesses that have paid back their loans. It should no longer have a say in how things are run. It's time for governments, here in the U.S. and abroad, to step out of the way and let stakeholders reign. They -- we-- have the power now. Whether we, as stakeholders, use it or not is the question at hand -- not whether companies should be so profitable.

The government, if it really wants to create a sustainable and ethical economy, should be educating stakeholders and empowering us with more rights.

Otherwise the government is enabling a faulty system of power where the buck gets passed but never falls into the right pockets.

We never had a stake, they stole that from us.We owned shares, not a low interest rate loan. The shares doubled in price, now they are paying back only the principal + 0.25% interest.The banks owe the Treasury $100s of billions more for capital gains they don't want to pay, and of course, we are letting them run off with it cause reporters are stupid."

- FDRAllOverAgain | 1:10 a.m. Today1:10 a.m. Dec. 18, 2009

Skeptics who warned fhat GM would destroy the Swedish car maker were right.

36 min ago2:16 p.m. Dec. 18, 2009 | Comments: 10

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