Corporate Governance

 

The Farmer And The Cowman

I don't say I'm no better than anybody else,

But I'll be damned if I ain't jist as good!

Territory folks should stick together,

Territory folks should all be pals.

Cowboys dance with farmer's daughters,

Farmers dance with the ranchers' gals!

What does sticking together mean with respect to corporate Board of Directors?

In macroeconomics, a production equation is a function of capital and labor, which is a recognition that it takes both to produce value.  Corporations are chartered by society.  A Corporation’s Board of Directors sets policies for how the corporation operates.

At present, corporate boards represent shareholder, i.e. capital, interests.  But capital is only part of a production function, and also this does not consider the fact that corporations are chartered by society.  Shouldn't seats on the Boards of Directors represent all three interests: capital, labor, and society. 

Corporate Board of Directors in many European countries are already required to provide seats to employees of the corporation, i.e. labor.  Employee-owned companies, as opposed to publicly traded companies, by definition, have seats that represent both labor and capital, because employees ARE the labor.  Corporations are often the subject of lawsuits because they are operating at odds with society.  Rather than lawsuits or union battles, it would seem reasonable that capital, labor and society all have seats on a corporation’s Board of Directors.  Then the operations of a corporation would not just represent one interest, i.e. capital, and perhaps then those corporations will be friends.