Tag Archives | employee ownership

Broad-Based Ownership at Twitter: Academic Perspective

twitter-co-op-620x412Through a proxy proposal, we asked the Twitter board to study broad-based ownership, such as cooperatives, for lessons to be learned on how to make Twitter both more productive and more democratic.

The proposal won enough votes to be brought back next year. In the meantime, we continue building a campaign and studying broad-based ownership models ourselves. With that backdrop, I was delighted to see commentary in Fortune by Joseph Blasi and Douglas Kruse entitled, Why Don’t Twitter’s Employees and Customers Buy the Company?   “Consider why it might actually work,” they argued. Continue Reading →

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What Ought to Be: Why Grow Up?

Why Grow Up? between what is and what ought to be

Why Grow Up? between what is and what ought to be

According to Susan Neiman, the most important distinction in the world is the difference between what is and what ought to be. Recognizing that distinction is central to the process of growing up. (Why Grow Up?: Subversive Thoughts for an Infantile Age)

You need not be Peter Pan to feel uneasy about the prospect of becoming adult. Indeed, it’s easy to argue that Peter Pan, most drastically imitated by Michael Jackson, is an emblem of our times. Being grown-up is widely considered to be a matter of renouncing your hopes and dreams, accepting the limits of the reality you are given, and resigning yourself to a life that will be less adventurous, worthwhile and significant than you supposed when you began it.

However, life doesn’t have to be less adventurous if you never give up on creating what ought to be. We all have an opportunity to change our culture, if only in small increments. Too many people are sleepwalking through life, thinking what is given can not be changed. Of course, it helps to know where we are and how we got there to understand what changes are possible or most likely. Continue Reading →

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August: 5, 10 & 15 Years Ago in Corporate Governance

Mr. Peabodys WayBackMachineCorporate Governance Publisher’s Note: Yes, you’ll find many broken links in the material referenced below. After 5, 10 and 15 years, the internet moves on. Many of the organization’s linked have since gone under. We’re just glad to still be here, offering our readers a sense of the history we have shared. More about the WABAC machine

Five Years Ago in Corporate Governance

CalPERS is believed by many, and for good reason, to be a paragon of virtue with regard to its advocacy of good corporate governance. Yet, their own election process had long been criticized as making it nearly impossible to unseat incumbents. At one point, the Board voted in favor of regulations prohibiting criticism of the Board in candidate statements, which were to be strictly limited to biographical information. To help remedy that problem I shelled out $500 to rent a hall, holding the first ever forum of CalPERS candidates. An expected winner who failed to show lost. Members finally had an opportunity to question candidates on their qualifications and their positions on the issues. These days, CalPERS is holding the forums in their auditorium. The next one is scheduled for September 16. See page 3 of Candidate Statement Booklet. For some of the latest issues, see CalPensions. Continue Reading →

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Chris Mackin on Employee Ownership: Our Video Friday Feature

Christopher Mackin

Christopher Mackin

Laura Flanders interviews Christopher Mackinthe founder of Ownership Associates, an advisory firm for broad-based employee ownership based in Cambridge, MA‎. Mackin is also an Adjunct Lecturer at the Rutgers School of Management and Labor Relations and a member of the core faculty of the Harvard Trade Union Program based at Harvard Law School. See a previous guest post by Mackin on corporate governance and employee ownership, Hobby Lobby and Rented Humans. I met Mackin about 35 years ago when we were both graduate students. He was at Harvard; I was at Boston College.

In this video, Flanders and Mackin explore employee ownership and, more broadly, democratic workplaces. Mackin points out: Continue Reading →

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Hobby Lobby and Rented Humans

Christopher Mackin

Christopher Mackin

Thought experiment: Suppose the 21,000 employees of Hobby Lobby had been anonymously polled about whether their company should pay for insurance coverage for contraception, as required by the Affordable Care Act. Suppose the results showed that a comfortable majority, say 55 percent, believed — against the views of their leaders in management — in full coverage. What can we deduce from this hypothetical but plausible scenario? Three deductions come to mind.

One is that the notion of a poll, while interesting, is a meaningless act. Under commonly accepted notions of corporate law, employee voice does not really exist. It has no “standing.” It does not count. In light of that cold hard fact, employees should simply accept the judgment of their betters in management and get back to work. Continue Reading →

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Step Into the Corporate Governance Way Back Machine for September

Time to step into the way back machine to see what we were writing about 5, 10 and 15 years ago. Five years ago @ Corporate Governance, I was pleading for readers to send comments to the SEC on their proxy access proposals. 30,000 letters wasn’t enough, in my opinion.

A shareholder proposal calling for a “say-on-pay” vote by shareowners on executive compensation at Activision Inc. (ATVI) filed by As You Sow received 69% of the vote at the company’s annual meeting held in Beverly Hills, California.  This may be the highest vote result so far of about 50 say-on-pay proposals voted on by shareowners this year.  Activision is a publisher of video games including Quake, Doom and Guitar Hero, and is currently all the news for its purchase of Bizarre Creations Ltd., the UK studio behind the popular Project Gotham Racing title. (Activision to Purchase U.K.’s Bizarre Creations, WSJ, 9/27/07) Conrad MacKerron, Director, Corporate Social Responsibility Program at the As You Sow Foundation, criticized the company for providing outrageous perks like paying the mortgages, Medicare taxes, and even pet-sitting for executives.  Continue Reading →

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Fix CEO Compensation by Broadening Incentive Pay

The defenders of executive compensation argue that senior executives make the most significant contribution to a company’s success; ergo, outsize compensation is justified. But the NBER Shared Capitalism Research Project has shown the opposite: Distributing rewards across the corporation—sharing them with workers—is the most efficient way of making businesses more successful. Motivated employees are more productive and spur innovation in products and processes…

Freeman, Blasi, and Kruse propose a simple way to encourage companies to follow the Googles and Wegmans of the world: Allow them to deduct incentive pay as a cost of business only if they offer the same incentive program to all workers. In other words, don’t give tax breaks to companies that provide stock options and bonuses to only a few executives. This would correct a major loophole in the tax system with which corporate executives have been enriching themselves at the expense of their stockholders and taxpayers. (The U.S. Tax Code does not allow the deduction of salaries beyond $1 million as a business expense, but it does allow companies to deduct as a cost of business any amounts paid as incentive compensation.)

This proposal is not as radical as it may seem. It is, rather, American capitalism at its best, the extension of a system that has engendered the success of such major companies as Google (GOOG), Apple (AAPL), and Procter & Gamble. The same principles already apply to pension and health-care plans—these are deductible as a cost of business only when they cover every employee. Compensation should be subject to the same rules, which will encourage more companies to extend incentive pay to all workers. And most importantly this change would make U.S. businesses more productive while benefiting workers.

via How to Fix Oversize Executive Compensation – BusinessWeek, 3/25/2011.

According to Corey Rosen, National Center for Employee Ownership:

The ideas here make sense. We have become infatuated with the idea that companies rise and fall based on a few key people. Yet study after study (and the rhetoric of CEOs insistent that “people are our most important asset”) show that the level of employee engagement at work is the single most important determinant of corporate performance. Engaged employees come up with the ideas, large and small, that move companies forward. Companies that share ownership widely grow 2-3% per year faster than would have been expected to otherwise, for instance, their employees have three times the retirement assets, and they are much less likely to go bankrupt.

As I recall, much of the research into employee ownership and worker participation showed tremendous gains when these factors were linked. There was a raft of experiments in the 1970s and 1980s. I, myself, was somewhat involved with Rath Meatpacking when it became the largest worker-owned firm in the United States. In many of these situations productivity shot up but management shut them down because employee participation took power away from them… especially middle management. I like the ideas advocated by Freeman, Blasi, and Kruse. Unfortunately, the Business Roundtable and the US Chamber of Commerce are likely to express strong opposition.

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