Ordinary people using Facebook and Twitter overturned dictators in Tunisia, Egypt and Libya. David Kirkpatrick of Techonomy Media, which promotes the integration of technology with business and social progress, writes “this social might is now moving toward your company… you’d better get out of their way—or learn to embrace them.”
Gary Hamel, one of business’ most eminent theoreticians of management says,
I don’t think it’s crazy to ask if your CEO is the next Mubarak. The elites—or managers in companies—no longer control the conversation. This is how insurrections start.
Says Marc Benioff, CEO of Salesforce.com: “This isn’t just about Arab spring. This is about corporate spring.”
Twitter is a potent broadcast tool for anyone with a following. By “checking in” via a smartphone app or SMS through FourSquare, users share their location with friends. Foursquare allows users to bookmark information about venues and make suggestions. Merchants use tools to obtain, engage, and retain customers and audiences.
GroupMe enables users to send a single text or make one telephone call to a group of up to 25. Its like a private chat room that works on any smartphone for free. With such tools, users “inevitably end up working, maybe even conspiring, together,” says a representative of HearsaySocial.
Harvard Business School professor Shoshana Zuboff co-wrote The Support Economy: Why Corporations are Failing Individuals and the Next Episode of Capitalism. She says a background of mass produced goods produced a new human mentality—of a self-determining individual. This mentality was once the unique precinct of the elite: the wealthy, artists, poets, philosophers. And it became the mentality of everyone… in this new world value is not created inside the organization. It rests in the unfulfilled needs and desires of the individual. Now I have to come to you and say, ‘Who are you? Tell me about yourself. How do you want to live?’”
“Digital suffrage is upon us,” proclaims Venkatash Prasad, Ford’s high-wattage leader of product social networking efforts, in an e-mail. “Everyone has a right to a byte of the action, and we have embraced this might of the byte within Ford, through the use of internal and external social networks.” (Social Power and the Coming Corporate Revolution, Forbes, 9/7/2011)
While David Kirkpatrick’s focus is mostly on customers and employees, at CFO.com Marielle Segarra hones in directly on shareowners in What Happens When Shareholders Socialize? Websites like StockTwits and Moxy Vote have provided shareowners online platforms to discuss their stocks and organize around causes in real time. Shareowners voting through such sites have already been able to oust CEOs and stop mergers and acquisitions in their tracks.
Mark Schlegel, co-founder of Moxy Vote says the site taps into social media’s ability to mobilize.
If users think, ‘Hey, I can mobilize my friends to show up at a concert I’m going to,’ they can just as easily say, ‘I can mobilize my friends who own shares of [a company] to vote against [the chair’s] reelection.’
Last proxy season, advocacy groups used Moxy Vote as a way to be heard filed 360 shareholder proposals addressing everything from the disclosure of political contributions to a restaurant chain’s use of cage-free eggs.
Next year, shareowners will also be mobilizing on the US Proxy Exchange, forming groups around companies and issues. Join USPX to be a part of those discussions and part of the action.
I’m hoping to make my own site more interactive as well. I’ve tried a number of tools to facilitate the ability of readers to post on CorpGov.net with little luck. Spam kept getting through until I took the drastic step of practically having people e-mail their corporate governance resume before I’d allow them to post comments. That not only put a stop to the spam; it put a stop to the comments. Now, all you need to do is join USPX for $12/month and you’ll be able to post comments to either site… and so much more on USPX.
It will take a few months for social media tools to develop around shareowner action but corporate spring is coming.
These are exciting days, both for the Arab Spring and for a possible Shareowners’ Spring. But there are no guarantees. While most people trace the Arab Spring to Tunisia, that uprising actually followed another that failed. Remember the Iranian uprising a couple years ago? Bahrain’s uprising was violently crushed. Syria’s hangs in the balance as the body count mounts. Technology does not win revolutions. People do. At best, technology is a facilitator.
Internet use has been widespread for fifteen years now, and shareowners have done surprisingly little to employ it to exercise their ownership rights. Here are some of the hurdles we face:
– Designed-to-fail implementations: Corporations have used technology to offer shareowners virtual-only shareowner meetings that have ended up disenfranchising some. The SEC has issued rules for “shareowner forums” that are so unworkable as to ensure forums conducted under those rules will wither.
– Knowledge gap: When Arabs rise against dictators, they know full well what it is they are fighting. But shareowners are less informed. How many individual investors attach any significance to the terms “DTC”, “14a-8”, “Broadridge”, or “OBO/NOBO”? If you don’t know what it is you are fighting, you are probably going to lose.
– The SEC’s opaque proxy solicitation rules: Any shareowners who attempt to organize around specific issues at specific corporations face the risk of enforcement action by the SEC. The commission’s proxy solicitation rules are onerous and vague, especially when it comes to shareowners organizing through social media. In this regard, the commission’s “shareowner forum” rules can be seen as a threat: They define how far it is safe for shareowners to go …. and according to the rules, that isn’t far at all.
Back in 2008, Jim McRitchie and I joined with a handful of other shaeowner-activists to launch the United States Proxy Exchange (USPX). Its purpose is to address the above challenges. Since then, we have confronted regulators and executives. We have worked to educate shareowners. We have built a community. This month, we are taking another step along this path: transforming the USPX website (http://proxyexchange.org) into a powerful social networking platform. Members can now post profiles, launch their own blogs, form groups, discuss issues on forums, and self organize around issues.
The new website is fully operational. Members are just starting to test the new functionality and post content. I encourage everyone to check it out and become a member. Some day you can tell your grand children “I was part of the revolution.”
Yes, governance is a little more obscure to most who don’t work in the area day to day. Education is very important. Most investors know the value of researching which companies to buy but few spend any significant time on upkeep… participating as a corporate citizen.
Just as with any “democratic” institution, those who know the issues and who lobby often end up controlling and pushing organizations in directions that benefit only the few. Of course, power also is a major factor.
As you point out, many of the rules are stacked against us but just as the phrase “all men are created equal” in the Declaration of Independence became something to rally around, the fact that corporate “elections” are presented as being real elections can also become a focal point.
A great number of reforms are needed and there is much work to be done on various fronts. Corporate spring is certainly not an inevitability. You are right that technology can also be used to suppress. Rich and powerful entrenched interests have all the money they need to keep corporate democracy in check. Not only do they have way more money than we do, they also have our money because we are invested in the companies they control.
Without tools, without a vision of what steps can be taken, people give up hope. They are afraid their efforts will simply be wasted. Hopefully, the USPX site and other efforts will renew our idealism. Corporations are socially constructed entities of our own making. We can reshape them to spread their benefits. Is it right that named executive officers have upped their share of corporate profits from an average of 5% to now 10%? I don’t think so.
At least those who are concerned now have the tools to identify each other, to begin to communicate and to act collectively. Our collective actions change the rules and the world in a positive direction, as well as helping us make a little money in the process. Thanks to you and Kevin and others who have increased our technological capacity on a shoestring budget.
Writing is good and action is better. Social media offers a means for shareholders, within heavy constraints to discuss the companies they own. I will be hosting one of the first shareholder forums later this fall. More information to follow.