Academic journal article Journal of Corporation Law

Toward Common Sense and Common Ground? Reflections on the Shared Interests of Managers and Labor in a More Rational System of Corporate Governance

Academic journal article Journal of Corporation Law

Toward Common Sense and Common Ground? Reflections on the Shared Interests of Managers and Labor in a More Rational System of Corporate Governance

Article excerpt

I. FORCES BUFFETING AMERICAN PUBLIC CORPORATIONS
   A. Forced Capitalism
   B. Shrinking Equity Returns and the Mountains of Money in
        the Markets
   C. The Corporate Governance Industry
   D. Academic and Journalistic Laziness
   E. "Professional" Independent Directors
   F. The Globalization of Capital and Product Markets Without the
        Globalization of Externality Regulation
   G. Despite High Wages, CEOs Are Not Enjoying Their Jobs
II. COMMON GROUND FOR MANAGEMENT AND LABOR?
   A. Settling the Continued Takeover/Corporate Election Hoo-ha
        1. Abandon Classified Boards but Keep Traditional Poison Pills
        2. Create a Rational Corporate Election and Accountability
           System
        3. No More Pizza on the Wall
        4. Quiet the CEO Pay Furor
        5. Give Managers and Directors More Time to Focus on Business
        6. Temper the Influence of Short-term Stockholders
        7. Reduce the Focus on Quarterly Earnings Estimates
        8. Confront the Agency Problem Of Institutional Investors
        9. Encourage Investment and Discourage Churning
       10. Eliminate the Connection Between Health Insurance Access and
             Employment at a Particular Corporation
   B. A Management-Labor Commitment to Globalizing Enlightened
        Externality Regulation
III. CONCLUSION

Dear friends, it's a pleasure to be here in Iowa. One of my childhood heroes has been visiting you all a lot lately. In my current job, it would be improper to speak his name or of my continued high regard for him and his willingness to speak seriously, candidly, and expertly about the important issues facing our nation. But if you think of my home state and if I tell you that he inspired my hairstyle, you just might make a pretty good guess. After all, each of you made the Journal.

As my chronological age has caught up with my hairline, I have become more uncertain about virtually everything. This convictional plasticity is, I admit, not entirely new. I've always been suspicious of absolutism and unexamined truths.

But my distrust of dogmatism has grown deeper during my career as a lawyer, nearly all of which has been spent in public service. In that career, I have been fortunate. During my time in the political world, I was privileged to work for an electorally courageous and policy savvy governor, Thomas R. Carper of Delaware. Governor Carper was a "New Democrat" before the term was invented, a fiscal conservative deeply committed to economic and educational opportunities for the poor. The secret of Governor, now Senator, Carper's success is his willingness to eschew the politics of labels and to pursue progress through patient dialogue. As Governor Carper's counsel and policy director, it was my job to help him bring Democrats and Republicans together around an aggressive agenda to, among other things, reform Delaware's education and welfare systems. Typical of Governor Carper, those reforms combined stringent accountability standards (which appealed to conservatives) and generous funding for new services (which appealed to liberals). The formulation and implementation of policies along those lines was challenging, as it required the affected constituencies to compromise long-held beliefs about means in order to advance common ends. But the inclusive manner in which Governor Carper proceeded earned him respect from the contending interests and enabled him to advance an agenda that addressed his most important objectives for our state.

When I was fortunate enough to join the Court of Chancery, one of my first assignments was to mediate a case pending before Vice Chancellor Lamb. He knew that I had forged legislative policy deals for Governor Carper and thought I might have a knack for mediation. He was right to perceive that the achievement of political compromise and the successful mediation of lawsuits demand similar skills. Both require an understanding of the concept of face, the recognition that everyone must leave the process having preserved their dignity and self-respect. …

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