For years I wanted to live in the US. Not that there was anything wrong with Australia but the US seemed lively, exciting and certainly where all the action was.

On reflection I can now see why I was so stupid and naive.

Despite all the great things the US has done, and there's a lot of them, and what it has to offer (even despite the years of George W. Bush), there are some very profound issues I have with the US.

1. Capitalism: now don't get me wrong here - I'm a capitalist through and through but the American system is so warped that it is to Capitalism what Mao's China was to Communism: heartless, extreme, lacking compassion and very doctrinaire. It's all about sink or swim.

You can't tell me the the alleged richest country in the world can't support its poor, uneducated, jobless and disadvantaged? It's not that they can't, but their form of Capitalism is about excess, hedonism and the accumulation of excessive wealth - regardless of its impact on society. Surely it's only a matter of time before their society will be in upheaval - or collapse. It seems like the Roman Empire all over again.

2. Health System. Obama is certainly on the right track here but the Neanderthal Right just won't give in.

3. Gun Laws: the world watches in open-mouthed disbelief at the sheer idiocy of Americans who extol their right to own arms and then cry in anguish as some pimple-faced teen guns down a classroom of helpless students with a semi-automatic rifle. This is not freedom - but rather enslavement to a doctrine without understanding, or being prepared to understand its implications - a vicious and stupid treadmill that Americans are too stupid to get off.

4. The legal system and its litigious nature: Sheer idiocy - but because it's spreading from the US to the rest of the world, we are all suffering from the inaccessibility to the law and fair legal process.

5. The Evangelical Right: I do not see the difference between the radical Evangelical Right and the Muslim radicals, except that the Evangelicals appear to have enormous influence in Washington. Scary stuff.

6. Debt. As long as Americans continue to live beyond their means, the more likely that the day of 'come-uppance' will arrive. My advice to the US: don't piss off the Chinese because they'll pull the plug on the US debt - even if they hurt a bit in the process. It's only a matter of time.

Of course, if Americans woke up to their reality, they'd increase their taxes for a few years and eliminate their indebtedness - but they won't do that since increased taxes contravenes their Capitalist, right-wing ethos of wealth maximisation, living to excess and small government. 

They seem incapable of understanding the difference between "common good" and "individual rights"; between "the activities of government" and "responsible government"; between "government helping to facilitate the economy" and "the government interferring in individual economic rights." 

They're free of course to do what they want - but don't expect the rest of the world to feel sorry for them when the shit hits the fan - as it will.

It's my view that history will show that the American empire started it's decent when George W. Bush came to the throne. Since then, the capitalists have been, like Nero, fiddling and gorging themselves on the excesses of a distressed society. We can only imagine what the epilogue will say!


Postscript 18 January 2011: I received this anonymous comment: "THEN KEEP YOUR SORRY ASS IN AUS?" .... and that ladies and gentlemen, is why the US is in the state it's in. A group of redneck fascists who don't understand that other people have legitimate opinions about things they don't agree with. Not only are they quite infantile on matters to do with taxation, economic revival, gun laws, medical services, education, business, politics, culture, etc; they are also profoundly arrogant (a generalisation of course). 


There are many US citizens who say that we are not Americans therefore we are not entitled to comment on the US. Fair enough except that US capitalism, entertainment, and culture is imposing itself on the rest of the world and profiting by it. While that happens, we in the rest of the world have a right to express our opinion about those influences being "imposed" on us that are harming our culture, environment and context.

Those of you who are familiar with my work and writing, will know that I am an advocate for the shareholder. Not a fanatical and myopic advocate that promotes shareholders over every stakeholder regardless of the circumstance; but rather one that recognises that a corporation exists for the benefit of those who invest in it - i.e. its owners.

Shareholder "satisfaction" is about optimising circumstance and opportunity to deliver reasonable shareholder expectations in that context.

My published research on shareholder primacy focused on management subjectivity and the way their decisions, ill founded but well intentioned, dictate organisational behaviour and the ability, or not, for shareholders to be satisfied.

My writings to date have only superficially dealt with directors and their role in the shareholder versus corporation debate. Two recent incidents have forced me to broaden my focus to include the powerful influence that directors have in aiding or thwarting the proper destiny of the corporation. Up till now, it has been managers who have got most of the blame for shareholder dissatisfaction.

Incident One

I was recently nominated to a listed board by over twenty of its shareholders. Although the board had vacancies and had performed poorly, and my credentials to serve were sufficiently strong as to have secured the nomination of nearly 10% of the shareholding, the  board refused to support my nomination. Their argument was essentially, that the appointment  was unnecessary. The ultimate vote in support of my nomination exceeded 20% of shares held.

The company had clear, visible, public and negative relationships with many of its shareholders and shareholders who supported my nomination were keen to see my shareholder-centric methodologies and philosophies incorporated into board deliberations and practices.

What we saw here was a small group of directors subvert the desire of a significant (albeit minority) group of shareholder desires.

Incident Two

I contacted a leading director organisation offering to have a chat with them about one of their governance principles relating to the responsibility of directors to align the corporation to shareholder "value" expectations. I mentioned that the rhetoric was nice, but there was no independent and quantifiable measure that was used to ensure that this principle was complied with. The operationalisation of this principle is entirely a subjective decision of the board and its directors. 

I proposed an independent Shareholder Certification / Accreditation body and invited the organisation to participate in its establishment in order to demonstrate thought leadership and practical application of their own principle.

The response from them was that "there is no appetite for further accreditations, or certification of companies."

This is a self-serving attitude that avoids accountability of the board and its directors to its shareholders.

Implications

I am of the view that the majority of directors have gained their corporate experience and credentials through their management roles over the years. They have achieved their elevated positions of director by "playing the corporate game", i.e. by thinking as management do - complete with its subjectivity, biases and arrogance.

To expect directors to suddenly change their views and beliefs the moment they enter the board room is unrealistic and unlikely.

In order for directors to take their own rhetoric seriously, rather than merely a sop to placate shareholders; directors, boards and corporations should be forced to align to their shareholders.

There are two ways to do this: either through legislation or through market forces.

The former is unlikely because of the short-sightedness and 'weakness' (read "gutlessness") of the government.

Therefore the only practical way for corporations' directors and managers to be brought into line is to have the corporation punished for non-compliance through an independent Shareholder Certification/Accreditation scheme.  

Shareholder Certification

A Shareholder Certification body would deliver the following benefits:

For Shareholders/Investors/Owners

a. Decreased risk in making investment decisions by matching an organisation’s overall shareholder objectives with their own objectives.
b. Informed investment decisions through the provision of independent and quantified representation of shareholder objectives for each participating company.
c. Enable more effective investment choice by allowing investors to select from a range of shareholder objectives of different companies. The investor would select the investment that provided the greatest probability of fulfilment.
d. Provide a reliable and objective method for measuring the performance and competence of a corporation and its C.E.O.
e. More easily identify areas of poor performance or under-performance and a greater ability to scope the impact of such under-performance.
f. More easily able to “gather the evidence” to justify a change to the Board as a result of poor performance.

For Boards and Management

a. More effective and easier corporate governance through the identification of legitimate, recognised, owner-approved and quantified objectives which form the raison d’etre for a corporation’s existence and which define its objectives and form the context for its mission, vision, strategies and actions.
b. More easily able to determine and resolve efficacy and appropriateness of management and board decisions and actions.
c. More easily able to monitor and assess the outcomes of management and board decisions and actions.
d. Better able to assess corporate, C.E.O. and management performance.
e. Clearer and less ambiguous expectations against which directors and management are held accountable.
f. Better able to match shareholder objectives with management objectives and strategies therefore better able to meet shareholder expectations.
g. Ability to communicate and individually report to each shareholder based on that shareholder’s personal objectives.

For Brokers, Analysts and the Public
a. Better able to gauge investment options for clients using the Investor Profile tool.
b. Better able to provide effective investment-specific performance measures which will assist in identifying performing and underperforming investments.
c. Better able to decrease broker/client risk by increasing the frequency that broker advice will satisfy client expectations.
d. Better able to decrease the perception of risk in the investor community and thereby bring otherwise risk-averse investors into the market.
e. Decrease the “speculative” character of investments.
f. Increase the opportunity of enhancing the relationship between investor and broker through a better understanding of the character of client objectives.
g. Enhance the opportunity for brokers to develop their own owner profile methodologies which mirror Owner Accreditation, and which enable account relationships to be personalised and enhanced.

For Regulators, Legislators and Government
a. Sees that the onus for corporate governance is accepted and exercised by shareholders.
b. Sees the initiation of an effective non-government regulatory process that is equally applicable for all organisations.
c. Avoids accusations of “big-brother” regulation.
d. Sees leading edge and world first corporate practices introduced into Australia.
e. Relieves some pressure from the Australian Securities Commission, Australian Stock Exchange and others to enhance regulation.
f. Enables Australian commerce to be seen as less risky for investors.
g. Will attract capital into Australia.
h. Supports new corporate structures and philosophies which will avoid a repetition of the heady days of the 1980s and the recent GFC.

My associate, Dr Kenneth J Preiss, Chairman of PreissLevyJacoby & Associates has written a wonderful article on competition.

"Current debate about competition policy and practice fails to address the interests of a central player in the market dynamic – the end consumer" he states. Read the entire article on the PLJ website at http://www.pljanda.com/news/competition-is-failing-us/