The New Global Investors: How Shareowners can Unlock Sustainable Prosperity Worldwide

by Robert A.G. Monks

Large corporations dominate our world. More than any other factor it is corporations that decide who is rich and who is poor, what kind of education we enjoy, the quality of our environment and the... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 1841121096
• ISBN13: 9781841121093
• Release Date: July 2001
• Publisher: Capstone
• Length: 320 Pages
• Weight: 1.15 lbs.
• Dimensions: 9.6" x 1.0" x 6.5"

Customer Reviews

interesting analysis of corporate hegemony

Robert Monks is the world's highest profile shareholder activist. The subtitle of his book, "How shareowners can unlock sustainable prosperity worldwide" gives some hint about its content. Monks calls for greater corporate accountability and returning the control of corporations to shareholders. He argues that the separation between control and ownership of corporations has lead to the death of corporate social responsibility.This insight is a powerful one. For while it has become clear that the power of transnational corporations often exceeds that of national governments, exactly who controls that power? The corporation embodies a life of its own and the corporate managers are accountable to no one. Monks sets out to explain how such a state of affairs came about.Beginning with the first East India Trading companies Monks charts the rapid rise of the corporation to its present dominant position in our society. He identifies the discontent with multinational corporations most outwardly expressed at protests in Seattle and Prague, but also observes that this feeling of discontent is shared by many traditional supporters of capitalism. He makes reference to his home state of Maine where people have been left behind by "corporatization". People living in the traditional way have become impoverished both in spirit and in means. Yet he fails to extend these observations beyond the borders of the USA to the Third World.Monks sees a class of institutions that he labels as Global Investors, which are the public and private pension funds in the US, UK, Canada, Netherlands, Australia and Japan, as being the key to unlocking the power of ownership in corporations. Pension funds represent the interests of individuals who will typically retire in about twenty years and the interests of these individuals are to live in a safe, morally just world. There is no great difference between the interests of shareholders and the interests of society so, as Monks puts it, "Ownership involvement can provide a valuable 'creative tension' disciplining corporate energy to be compatible with needs of society." He believes that activism (by shareholders) can actually add value to and improve corporations. He cites Ford as an example of a company where the owners have maintained an interest in controlling the company with some positive outcomes. Although I would suggest that while the business practices of Ford might be better than some of their competitors, this does not necessarily mean they are good per se. The problem is that the activism of shareholders will always maintain some level of self-interest, in contrast to the grassroots activist whose motivation will be more altruistic.My main criticism of the book is that while it provides a strong critique of corporate capitalism it fails to go further in its critique of the capitalist paradigm. However, as an attack on corporate hegemony this book provides an interesting analysis.

Can Pension Funds Change the World?

Can Pension Funds Change the World?Pension funds are not generally renowned for revolutionary acts or activisim. Monks however, designates them as potential change agents 'par excellence'. Calling them the new global investors, he believes their economic clout (without historical precedent ), and global reach affords them the opportunity to effect widespread societal change. 'By exercising their fiduciary duties to increase the wealth of their beneficiaries, they can literally change the world, since so much of the world is theirs', he says. He sees these pension funds wielding enormous power and influence not just by who they distribute their money to but their impact in how that money is managed.Pension funds are enormous, and growing. Funds in the UK account for an amount equivalent to 62% of the UK's GDP, in the US 45% of the US GDP, and in Australia 18% of Australia's GDP.Monks believes pension fund trustees must demand transparency of the corporations they are invested in, and actively manage their investments rather than being content to 'sit back and passively pick up profits without knowing or caring where they came from'. Monk's game plan for affecting this change focuses on the pension funds adopting a three point global corporate constitution requiring the companies they invest in to:Fully disclose their impact on society n Reveal how much they spend on involvement in the elective, administrative and regulatory public processes Obey the law.Point one is receiving growing public and government support. Since July 2000 pension fund trustees in the United Kingdom have been obliged to disclose in statements of investment principles 'the extent (if at all) to which social, environmental and ethical considerations are taken into account'. Legislation similar to this is currently under consideration in Australia.Monks argues that socially and environmentally responsible investing is a part of a pension fund's fiduciary responsibility in meeting their legal requirements to invest in their beneficiaries best interests. He points out that socially and environmentally irresponsible behaviour will result in externalised costs such as environmental damage and risks to public health. These costs are eventually reflected in the company's stock price when the market perceives increased risks to future revenue from loss of reputation, possible lawsuits and fines. Pension fund trustees, Monks holds, have a duty to demand that the management of the companies in their portfolios are not only working effectively to maximize profits today, but also acting in a socially and environmentally responsible manner as the most effective way to ensure sustainable value for the future.Transparent, accountable corporate governance has received renewed attention recently with legislation in the United Kingdom proposing the so-called "corporate killing" crime, rendering companies liable for corporate manslaughter and directors being subject to disqualification. In Aust