Articles/Annotated

[Annotated] What if the unwashed masses got to vote on companies' strategies?

af334 2017. 12. 3. 09:42

Digital technology makes true shareholder democracy more feasible[각주:1]


Anglo-Saxon capitalism has had a bad decade. It is accused of stoking inequality[각주:2] and financial instability[각주:3]. A relentless[각주:4] pursuit of[각주:5] shareholder value has led big firms to act in ways that often seem to make the world a worse place. Aeroplane seats get smaller, energy firms pollute the air, multinationals[각주:6] outsource jobs[각주:7] and Silicon Valley firms avoid tax. Some people think that governments should exert more control over[각주:8] private enterprise[각주:9]. But what if the answer to a deficit of corporate legitimacy[각주:10] was to give shareholders even more - not less - power?


That is the intriguing possibility[각주:11] raised by a new paper by[각주:12] Oliver Hart of Harvard University and Luigi Zingales of the University of Chicago. Their argument has two parts. First, the concept of shareholder capitalism[각주:13] should be expanded[각주:14], so that firms seek to[각주:15] maximize shareholders' welfare, not just their wealth. Second, technology might allow firms to make a deeper effort to discover what their true owners want. Over 100m Americans invest in the stockmarket, either directly or through funds. It is their money at stake[각주:16], but their views[각주:17] and values[각주:18] are often ignored. 


Not long ago mass participation in the stockmarket was held to be an essential part of a healthy market economy[각주:19] - for ordinary people to back capitalism, the argument went, lots of them had to have a direct stake[각주:20]. In the 1960s, individuals directly owned over 80% of American shares and over 50% of British ones. Margaret Thatcher privatized[각주:21] British firms in the 1980s and used TV campaigns to sell shares to the public. Her aim was to bring "ownership, capital and independence" to millions of workers. 


Somewhere along the way this dream has been lost. Most peoples' investment are now funneled through[각주:22] investment managers (individuals directly own only about two-fifths of all shares in America and less than a fifth in Britain). A few giant money managers[각주:23] have a dominant voice. America Inc still has "proxy" votes[각주:24], where crazy proposals can be made - but these resemble[각주:25] a Potemkin shareholder democracy[각주:26] which is really controlled by technocrats[각주:27]. Asset managers[각주:28] have defined their mission as[각주:29] maximizing the market value of[각주:30] their clients' portfolios[각주:31], and in turn demand that firms maximize profits.


Ever since companies were granted the privilege of[각주:32] limited liability in[각주:33] the 1850s a debate has raged about[각주:34] their obligations to society[각주:35]. In an article published in 1970, Milton Friedman, an economist, made the case that[각주:36] a firm's only duty is to its bottom line[각주:37]. That is not as callous as[각주:38] it sounds. Most shareholders have a mix of financial goals and ethical beliefs[각주:39]. The profit-hungry[각주:40] firm can be part of a system that[각주:41] satisfies both their desires[각주:42]. The company creates profits which can then pay for the "ethical" objectives that[각주:43] a shareholder has: for example, charity donations to help the poor, or taxes to pay for a government-provided safety net[각주:44]. 


Unfortunately, as Messrs Hart and Zingales point out, this division of responsibilities[각주:45] does not always work. If a supermarket profits from selling machine guns to the mentally unhinged[각주:46], for example, there is no action that shareholders can undertake[각주:47] with those profits that can mitigate[각주:48] the ensuring deaths. And if the government is too dysfunctional to[각주:49] produce coherent policies[각주:50], there may be no way to offset[각주:51] the externalities[각주:52] - massive job cuts in[각주:53] one town, say - that profit-seeking firms[각주:54] create.


So sometimes the only way to maximize shareholders' overall welfare may be for the firm to look beyond profits[각주:55]. The authors argue that some interpretations of[각주:56] American law give boards of directors[각주:57] more room for[각주:58] manoeuvre[각주:59] here than is commonly[각주:60] understood. The next stage is to find out what shareholders want. Technology could help, allowing individuals to vote the shares[각주:61] held on[각주:62] their behalf[각주:63] by pension trustees[각주:64] and investment funds[각주:65].


The authors envision[각주:66] shareholders guiding the broad direction of[각주:67] company strategy[각주:68]. They do not elaborate on the details[각주:69], but imagine 100m  Americans pressing a "shareholder democracy" app on[각주:70] their phones. Grannies from Grand Rapids[각주:71] and cowboys from Colorado might vote for[각주:72] Delta Air Lines to provide more legroom[각주:73], Exxon to assume a higher carbon price[각주:74] when it drills for oil[각주:75], IBM to move some jobs from Delhi to Detroit and Apple to pay a higher tax rate than its current 18%. It would be a plebiscitary[각주:76] shareholder democracy, more in tune with what[각주:77] many Americans think, but more dangerous, too.


There are two big risks. One is that the combined voice of tens of millions of shareholders becomes a meaningless cacophony that[각주:78] no board can deal with. As Andrew Carnegie, the 19th-century Scottish-American tycoon[각주:79], put it[각주:80]: "Where stock is held by a great number, what is anybody's business is nobody's business." The other pitfall[각주:81] is that shareholders manage to produce a clear enough voice, but that this voice is stupid, fickle[각주:82] or sinister[각주:83]. This is clearly possible, too. Most individuals have little idea about the technicalities of[각주:84] running big companies. In the investment world retail shareholders are often known as "dumb money' because of their tendency to buy high and sell low.


Shareholders' values[각주:85]

Just as political democracy only works with checks and balances[각주:86], the same is true for shareholder democracy. Messrs Hart and Zingales suggest that for a proposal to be put[각주:87] to a digital vote by all shareholders, it would need the support of at least 5% to start with. Another safety mechanism would be to make the votes of ordinary shareholders non-binding[각주:88]. Boards would have to note them, but would not need to obey. Or people could invest through single-issue funds, which are identical to[각주:89] normal funds except that they guarantee to pursue a well-defined goal[각주:90] - for firms to pay higher wages, for instance, or to cut pollution levels. 


Plebiscitary capitalism[각주:91] may seem far-fetched[각주:92]. But the company has evolved continually to deal with pressures that boil up from[각주:93] society over time. More participation by ordinary, individual shareholders might be exactly what capitalism now needs to restore its reputation. 


  1. feasible ; [형용사] 실현 가능한 [본문으로]
  2. stoke ; 2. ~ sth (up) (감정을) 더 부추기다[돋우다] ;; 미국식 [stoʊk] 영국식 [stəʊk] [본문으로]
  3. financial instability ; 금융 불안정 [본문으로]
  4. relentless ; 1. 수그러들지 않는, 끈질긴 ;; 2. 가차 없는 [본문으로]
  5. pursuit ; 1. [U] ~ of sth 추구, (원하는 것을) 좇음[찾음] ;; 미국식 [pər|su:t] 영국식 [pə|sju:t] [본문으로]
  6. multinational ; [명사] ; 다국적 기업 [본문으로]
  7. outsource ; [동사] (상업) (회사가 작업・생산을) 외부에 위탁하다 ;; 미국식 [|aʊtsɔ:rs] 영국식 [|aʊtsɔ:s] [본문으로]
  8. exert ; 1. (권력・영향력을) 가하다[행사하다] [본문으로]
  9. private enterprise ; [U] 사기업, 민영 기업 ;; 참고 ; free enterprise [본문으로]
  10. corporate legitimacy ; Corporate legitimacy is the acceptance, desirability, and appropriateness that the people determine a company is worthy of. The judgment of the people is based on the goals that the company has set and the likelihood that they can be achieved. [본문으로]
  11. intriguing ; [형용사] (특이하거나 분명한 해답이 없어서) 아주 흥미로운 [본문으로]
  12. 문장내 by의 연속적 활용 사례 확인 [본문으로]
  13. shareholder capitalism ; 주주자본주의 [본문으로]
  14. expand ; 1. 확대[확장/팽창]되다; 확대[확장/팽창]시키다 [본문으로]
  15. seek to do ; ~하도록 시도, 추구하다 [본문으로]
  16. at stake ; 성패가 달려 있는, 위태로운 ;; that can be won or lost, depending on the success of a particular action [본문으로]
  17. view ; 1. OPINION | [C] ~ (about/on sth) (개인적인) 견해[생각/의견/태도] ;; 참고 ; point of view [본문으로]
  18. value ; 4. BELIEFS | [pl.] values 가치관 [본문으로]
  19. market economy ; 시장 경제 [본문으로]
  20. stake ; 3. [C] 지분(持分) ;; 4. [sing.] ~ in sth (사업・계획 등에 대한 개인적인) 이해관계[관련] [본문으로]
  21. privatize ; [타동사][VN] (기업・산업 분야를) 민영화하다 [본문으로]
  22. funnel ; [타동사] (~ed; ~·ing|~led; ~·ling) 2. <정력·자금·정보 등을> 집중하다, 쏟다 ((into)); 좁은 통로로 흐르게 하다; <정보 등을> 흘리다; (깔때기 모양의 것을 통해) <액체 등을> 붓다, 따르다 [본문으로]
  23. money manager ; [명사] 자금 관리인, 금융 자산 관리자; 금융업자, 투자신탁업자. [본문으로]
  24. proxy vote ; [명사] (선거의) 대리 투표. [본문으로]
  25. resemble ; [타동사][VN] [수동태로는 안 씀,진행형으로는 쓰이지 않음] 닮다, 비슷[유사]하다 [본문으로]
  26. shareholder democracy ; 주주지배주의 ; Shareholder democracy is the ability of shareholders to influence a board of directors through the exercise of voting rights associated with share ownership. The scope of shareholder voting rights and how they can be exercised has a significant impact on confidence in the capital markets. [본문으로]
  27. technocrat ; [명사] 테크노크라트(많은 권력을 행사하는 과학 기술 분야 전문가) ;; [NOUN] A technocrat is a scientist, engineer, or other expert who is one of a group of similar people who have political power as well as technical knowledge. [본문으로]
  28. asset manager ; 자산 관리자 [본문으로]
  29. define ; (defines[-z]; defined; -fin·ing) 1. …을 정의하다, 〔말〕의 뜻을 분명하게 하다; …을 설명하다; …을 (…이라) 정의하다[as]. [본문으로]
  30. market value ; [U , sing.] 시장 가치 [본문으로]
  31. portfolio ; 4. [금융] 투자 자산 구성, 포트폴리오, (회사·투자가가 가지는) 유가 증권 (일람표); 고객 명부 [본문으로]
  32. be granted sth ; ~을 받다, 취득하다, (권한이) 부여되다, 허용되다 [본문으로]
  33. limited liability ; [U] (법률) (부채에 대한) 유한 책임 [본문으로]
  34. rage ; 1. ~ (at/against/about sb/sth) (특히 고함을 지르며) 몹시[격렬히] 화를 내다 [본문으로]
  35. obligation ; 1. [UC][+to do]의무, 책임 [본문으로]
  36. make the cast that ~; ~를 입증하다, 주장하다, 강조하다 [본문으로]
  37. bottom line ; 1. (결산서의) 맨 밑줄; (계상된) 순익[손실], 경비 ;; 2. (상업) 최종 결산 결과 ;; [the ~] [본문으로]
  38. callous ; [형용사] 냉담한 ;; 미국·영국 [|kӕləs] [본문으로]
  39. ethical belief ; [명사] 윤리관 [본문으로]
  40. -hungry ; ~이 부족한, 필요로하는 [본문으로]
  41. be part of ; ~의 일부분이다 [본문으로]
  42. desire ; 1. [C , U] ~ (for sth) | ~ (to do sth) 욕구, 갈망; 바람 [본문으로]
  43. objectives ; 목적, 목표 [본문으로]
  44. safety net ; 1. (사회적인) 안전망 [본문으로]
  45. division of responsibility ; 책임분담 [본문으로]
  46. unhinge ; [타동사][VN] [주로 수동태로] 미치게[정신 이상이 되게] 만들다 [본문으로]
  47. undertake ; 3. 꾀하다(attempt), 착수하다, 손대다 [본문으로]
  48. mitigate ; [타동사][VN] (격식) 완화[경감]시키다 [본문으로]
  49. dysfunctional ; [형용사] (전문 용어) 제대로 기능을 하지 않는, 고장난 [본문으로]
  50. coherent ; 1. (생각・주장 등이) 일관성 있는, 논리[조리] 정연한 [본문으로]
  51. offset ; [타동사][VN] (off・set・ting , off・set , off・set) ~ sth (against sth) 상쇄[벌충]하다 [본문으로]
  52. externality ; [CU](pl. -ties) 4. (예측·의도되지 않은) 외적 영향[결과] [본문으로]
  53. job cut ; [명사] 일자리 삭감 [본문으로]
  54. profit-seeking ; Aiming to make a profit. ;; 영리를 추구하는 [본문으로]
  55. look beyond ; …의 앞쪽[건너편]을 보다; …을 예견하다, 마음속에 그리다 [본문으로]
  56. interpretation ; (pl. interpretations [-z]) [U, C] 1. 해석, 해설; (타인의 행동에 대한) 해석, 이해; 판단.;; 미국식 [ɪn|tɜ:rprɪ|teɪʃn] 영국식 [ɪn|tɜ:prɪ|teɪʃn] [본문으로]
  57. board of director ; 이사회 [본문으로]
  58. room ; 6. POSSIBILITY | [U] ~ for sth 여지 [본문으로]
  59. manoeuvre (英) (美 man・eu・ver) ; 2. [C , U] (이익 달성을 위한 영리한) 묘책 ;; 미국∙영국 [mə|nu:və(r)] [본문으로]
  60. commonly ; [부사] 흔히, 보통 [본문으로]
  61. vote ; [타동사] 1-a). [+目/+目+目/+目+to+名] 투표로 결정짓다, 가결하다; …에의 할당을[증여를] 표결하다 [본문으로]
  62. hold shares ; 주식을 보유하다, 지분을 가지다 [본문으로]
  63. behalf ; [명사] [U] 이익; 원조, 자기편; 지지 [본문으로]
  64. trustee ; 1. 피신탁인, 수탁자(受託者), 보관하는 사람; [美法]제3 채무자(garnishee) [본문으로]
  65. investment fund ; An investment fund is a supply of capital belonging to numerous investors used to collectively purchase securities while each investor retains ownership and control of his own shares. An investment fund provides a broader selection of investment opportunities, greater management expertise and lower investment fees than investors might be able to obtain on their own. Types of investment funds include mutual funds, exchange-traded funds, money market funds and hedge funds. [본문으로]
  66. envision ; [타동사] <장래의 일 등을> 마음에 그리다(visualize), 상상하다, 구상하다, 계획하다(contemplate) [본문으로]
  67. direction ; 2. DEVELOPMENT | [C , U] (발전・전개해 나가는) 방향[동향] [본문으로]
  68. company strategy ; 기업 전략 [본문으로]
  69. elaborate on ; …에 대해 상세히 말하다 ;; to explain or describe something in a more detailed way [본문으로]
  70. press ; 2. PUSH/SQUEEZE | (기기를 작동시키기 위해 버튼 등을) 누르다 [본문으로]
  71. Grand Rapids ; [명사] 그랜드래피즈: 미국 Michigan 주 서남부의 도시; 가구 공장이 많다. [본문으로]
  72. vote for ; …에 (찬성) 투표하다; 《구어》 …을 제안[제의]하다 [본문으로]
  73. legroom ; [U] (자동차・비행기・극장 등에서) 다리를 뻗을 수 있는 공간 [본문으로]
  74. carbon price ; Carbon pricing — the method favored by many economists for reducing global-warming emissions — charges those who emit carbon dioxide (CO2) for their emissions. That charge, called a carbon price, is the amount that must be paid for the right to emit one tonne of CO2 into the atmosphere.[1] Carbon pricing usually takes the form either of a carbon tax or a requirement to purchase permits to emit, generally known as cap-and-trade, but also called "allowances". [본문으로]
  75. drill for ; …을 찾기 위한 시추를 하다. [본문으로]
  76. plebiscitary ; [형용사] 국민 투표의, 일반 투표의; 국민[일반] 투표에 입각한. ;; [plɛˈbɪsɪt(ə)ri ] [본문으로]
  77. in tune with ; 장단이 맞아서, 조화되어 [본문으로]
  78. cacophony ; [U , sing.] (격식) 불협화음 ;; 미국식 [kə|kɑ:fəni] 영국식 [kə|kɒfəni] [본문으로]
  79. tycoon ; [명사] (재계의) 거물 [본문으로]
  80. put ; 10. EXPRESS | [자,타동사][+ adv. / prep.] (특정한 방식으로) 표현[말]하다, (말・글로) 옮기다 [본문으로]
  81. pitfall ; [명사] (눈에 잘 안 띄는) 위험[곤란] [본문으로]
  82. fickle ; 변하기 쉬운(changeable), 불안정한(uncertain, unstable) ; 이랬다저랬다 하는, 변덕스러운(inconstant, capricious) (opp. true 4). [본문으로]
  83. sinister ; 1. 불길한, 상서롭지 못한(inauspicious, ominous) ; 운수 사나운(unfortunate), 재수 없는, 화가 되는(disastrous), 불리한(unfarvoable) (to). ;; 2. 악의를 품은(malignant) ; 나쁜, 사악한(bad, evil), 비열한(base). [본문으로]
  84. technicality ; (pl. -ies) 1. [pl.] technicalities (어떤 일・작업 등과 관련된) 세부적인 내용 ;; 2. (법률・규칙 등에서, 특히 부당해 보이는) 세부 조항 [본문으로]
  85. value ;1. HOW MUCH STH IS WORTH | [U , C] (경제적인) 가치 ;; 4. BELIEFS | [pl.] values 가치관 [본문으로]
  86. checks and balances ; [pl.] 1. (권력의) 견제와 균형 ;; 2. (미국에서 대통령・의회・대법원 간의) 견제와 균형, 견제 원칙 ;; 참고 ; separation of powers [본문으로]
  87. proposal ; (pl. proposals[-z]) 1. [U, C] 신청; (종종 proposals) (…의) 안(案), 계획[for]; (…하는/…이라는) 제의, 제언[to do/that (節)]. [본문으로]
  88. non-binding ; [형용사] 구속력이 없는, 강제적이 아닌. ;; 동의어 ; non­obligatory. [본문으로]
  89. be identical to ; ~와 동일한 [본문으로]
  90. well-defined ; [형용사] (정의가) 명확한; 윤곽이 분명한, 알기[이해하기] 쉬운, 명확한 [본문으로]
  91. plebiscitary ; [형용사] 국민 투표의, 일반 투표의; 국민[일반] 투표에 입각한. [본문으로]
  92. far-fetched ; [형용사] 믿기지 않는, 설득력 없는 [본문으로]
  93. boil up ; (상황·감정이) 들끓다[비등하다] [본문으로]
저작자표시 비영리 변경금지 (새창열림)