July 3, 2011

SHAREHOLDERS vs. PARTNERS

Much is written these days that maligns the shareholder in favor of the less conflicted private company owners, otherwise known as partners. Well to cut to the chase, I think it’s a lot of baloney for the simple reason that self regulation, the ultimate bane of wall street, doesn’t work no matter how noble the endeavor.
Companies that tout the superiority of partnerships over shareholders often praise their civic duty. While many can bolster that claim with non-profit status, there is no evidence that suggest private companies provide more (as in count ‘em) results form direct community involvement than their public counterparts.
Public companies often get accused of pandering to public emotions when in fact the effort to be more civic minded is driven by the lure of tax advantages. Whether or not it is accurate in specific circumstances is that individuals are being monetarily rewarded for their ingenuity at the expense of those not. The end result in the minds of some is that such a reason eclipses the value of the civic effort at hand. My attitude is who cares? The number of companies who build schools, parks, zoos, museums, all over the world should be judged by their results and punishing them for the disproportionate rewarding of upper management should be a separate debate. To ignore that civic responsibility would be one of the first unintended consequences of shareholder prejudice.
Now is anybody not aware that non-profit organizations, particular those most well known, pay their executives corporate sized salaries. Mind you it’s done more or less according tot the same models used by public corporations. It’s also defended the same way, often insisting that high salaries insure the loyal retention of the best and the brightest of available workers. Partners as a means of ensuring a higher degree of social democracy, referred occasionally as employee owned, are not all created equal. Private companies have the same shareholder hierarchies that public companies do, whether they do business on the retail or multi-national platform a non profit institution, the successful ones anyway make enormous profits, they simply give them to the interests that they serve. The employees of those institutions often give shielded perhaps by their company’s philanthropic umbrella. Those interests at the pubic corporations are the employees, who are often accosted along with their companies and through guilt are giving money to an effort which noble, is often one they can’t afford.