Continued commitment to ownership-based governance.

Author:Monks, Robert A.G.
Position:The Shape of Things to Come - Brief Article
 
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THE CHIEF executive officers of large public corporations will conclude some time within the next 10 years that meaningful accountability to their own shareholders is desirable. Corporate governance has assumed its present cast due to the activism of a significant minority of the class of institutional owners. TIAAICREF and the public employee pension funds have set the governance agenda and have confronted recalcitrant managements. With some largely token exceptions, the pension funds of large corporations -- largely due to their conflicting interests -- have taken no part and have ignored the governance initiatives. And yet, on a global basis more and more institutions are becoming active. The private companies, notwithstanding their size, run the risk of creating a needless adversary.

At the same time as corporate governance grows, violence and boycotts against globalization -- a code word for the power of large corporations -- are becoming unignorable. Shell underwent a comprehensive transformation as a result of the successful boycott of its products in Germany in 1995. At present, Exxon Mobil is subject to boycott in Europe. These pressures demand response. Business certainly is reluctant to pose government as an answer.

Ownership-based...

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