Share owner is a bit of a of a misnomer.
Share implies making joint use of a resource where as really our intention from share ownership is to increase our personal wealth, not the community or collective wealth.
I work for a publicly listed company.
My company has been sued in the US on a patent infringement.
The share price goes down.
To counter the share price fall, sales need to go up to get investor confidence back, projects and resources are cut back and I lose commissions because my sales targets are now too high. Over all sales go up slightly and the share owners are happyish again.
Similarly a global competitor to my company guarantees 10% growth for their shareholders EVERY YEAR.
In a mature market where you have a large share of the market how do you acheive that. Sales targets up, resources and innovation down, redundancies.
If the effort to keep a handful of shareholders happy was instead focused on the company and the wider community it interacts with would we not have better work places and maybe a more profitable society?
Who really wins though. The tax accountants and lawyers.
http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/
ReplyDeleteAn American centered story but essentially goes deep into the reasons why share ownership is actually not all that great an idea,