[IP] Howard Dean | The Myth of Corporate Accountability
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Date: September 27, 2004 8:57:02 PM EDT
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Subject: FOCUS: Howard Dean | The Myth of Corporate Accountability
FOCUS: Howard Dean | The Myth of Corporate Accountability
http://www.truthout.org/docs_04/092804V.shtml
The Myth of Corporate Accountability
By Howard Dean
yubanet.com
Monday 27 September 2004
In recent years, thousands of good paying American jobs have been
sent overseas. Free trade has made it much easier for corporations to
do business elsewhere, but free trade does not make it easier to
protect workers and the environment elsewhere. This results in lost
American jobs and downward pressure on American wages and benefits;
leading to just what short sighted leaders in the world business
community hoped for - to make quarterly results better.
But the truth is that there are very few "American" corporations
of any size left. An even sadder truth is that many of these large
multinationals no longer value employees as people, they see labor as
nothing more than a commodity. And in the last ten years, they have
seen small investors as a commodity as well.
The examples of corporations taking advantage of laborers and
consumers are well-known. Enron bragged of how they cheated
grandmothers who depended on them for electricity in California and
also cheated their own employees by recommending they buy more stock in
their pension funds as company executives were selling. Tyco’s top
officers used millions of investor dollars for their own personal
expenses. American Airlines’ former chairman secretly took huge pay
increases while negotiating pay cuts for the company’s pilots, flight
attendants and mechanics.
There are many reasons for all this, including a lack of moral
tone set by the federal government. Congress and the Bush
administration allow and encourage this behavior.
Tyco, for example, is an "American" company headquartered in
Bermuda. This allows them to avoid a lot of American taxes and at the
same time, makes it harder for small investors to get information and
accountability from the leadership in the company.
Most CEOs, whose pay has skyrocketed despite lousy performance
over the past few years, have a majority of insiders on their boards
while the outside directors are hand picked. There is no "corporate
conscience" unless the CEO wants one.
Corporate governance is often a matter of state law. Delaware has
thousands of businesses incorporated there simply because Delaware laws
make it more difficult than most states to enforce the obligations that
directors have to shareholders.
If we want more and better jobs, a fair trade policy, better
behavior by corporate leaders, more pay equity between those who work
and those who lead and better corporate morals, we need to make that
happen by doing the following:
• Insist that Congress stop voting for trade agreements with no
enforceable labor or environmental standards.
• Government contracts should be preferentially given to real
American companies, particularly defense contracts.
• Create stronger federal enforcement of corporate accountability to
shareholders.
• Open the election process for directors of publicly owned
corporations so investors can easily nominate and elect outside
directors. Public ownership of companies should mean public majorities
on the boards - in other words more outside directors that are not hand
picked by CEOs.
• Hold CEOs accountable for what they say. If pay packages for
workers are determined by merit and by results, so should the pay
packages of corporate leadership. Hypocrisy leads to disrespect, which
undermines any organization.
The stakes are high. America is rapidly losing its dominate
position in the world economy as jobs move elsewhere and Americans lose
faith in the moral leadership of the business community. Small
businesses and small communities are the first casualties of corporate
indifference and of our falling standard of living. If we want a strong
America, we need a strong business community.
Howard Dean, former governor of Vermont, is the founder of
Democracy for America, a grassroots organization that supports socially
progressive and fiscally responsible political candidates. Email Howard
Dean.
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