Book Review - The New Capitalists - How Citizen Investors Are Reshaping The Corporate Agenda
I will admit to thinking that pension funds like CalPERS were a bunch of meddlesome activists who were throwing their weight around. But after reading The New Capitalists: How Citizen Investors Are Reshaping The Corporate Agenda by Stephen Davis, Jon Lukomnik, and David Pitt-Watson, my views have been significantly altered. The true owners of corporations are now stepping up and demanding accountability.
Part 1 - The New Capitalists: The Civil Economy - The Democratization of Ownership; Business Past - The Uncivil Economy
Part 2 - The New Capitalist Circle of Accountability: The Future Corporation - A Capitalist Manifesto; Institutional Investors - Mobilizing Ownership; Boards of Directors - A New Accountability
Part 3 - The New Capitalist Ecosystem: Monitoring the Market - The Information Moguls; Accounting Standards - Escaping Brother Luca's Boxes; NGOs and Capital - Civil Society Meets the Civil Economy
Part 4 - The New Capitalist Agenda: Action Memos - The New Capitalist Agenda; Epilogue
Notes; Selected Bibliography; Index; About the Authors
The authors start out by making the point that corporations are no longer held solely by rich individuals and families. The largest investors in many cases are mutual and pension funds that represent millions of individuals. The capital they provide are the savings and retirement dollars of the man on the street, therefore making people like you and I the real owners in corporate America. And rather than just being share"holders" looking for a quick trade, these large funds are becoming share"owners". They are demanding accountability from company management and the board of directors, and they will bring about change if it doesn't happen. The recognition of this ownership role (as well as the use of it) is leading to partnerships between groups that were formerly antagonistic towards each other. The new Capitalist Agenda that the authors advance is the roadmap for how both of these groups can work with each other and mutually benefit from the partnership.
I used to think that corporations should be relatively free to do what they thought was necessary to conduct business. But the abuses of Enron, WorldCom, and many others cured me of that misconceptions. Instead of viewing these funds as drains on corporate America, I now see them as a vital balance of power. The New Capitalists helped me to solidify those thoughts and clarify my viewpoints. An interesting read...
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