“So the business leaders of today are not capitalists in the sense in which Arkwright and Rockefeller were capitalists. Modern titans derive their authority and influence from their position in a hierarchy, not their ownership of capital. They have obtained these positions through their skills in organisational politics, in the traditional ways bishops and generals acquired positions in an ecclesiastical or military hierarchy” (John Kay.)
John Kay makes a very interesting point in a recent blog post noting the separation of ownership and control within our big businesses. This got me thinking.
In a spiritual sense, I wonder who are the stewards of these business assets, the owners of the businesses or those paid to manage them?
Most shares today are owned by institutional pension funds that “you and I” contribute to as part of our employment. The members of these schemes delegate their voting rights to pension fund trustees who in turn delegate to their appointed professional fund managers who generally have no interest in corporate governance, just financial return.
In practice then, owners of big businesses have little or no influence over the strategic direction and ethical behaviour of their companies. Socially acceptable norms may guide board behaviour in a general sense of course, but there is little direct involvement from owners.
This disconnect can also manifest itself in graceless and legalistic behaviour by company officers who will generally be obliged to follow crude corporate rules in a way that they would not necessarily do were they owners of the businesses they are managing.
In the biblical parable of the unforgiving servant Matthew18:23-35, the King is able to forgive his steward a large debt because the debt is owed to him personally and he has the power to forgive it. The lending officer of a bank is not empowered to forgive a loan in that way. He cannot use his judgement and show mercy, he is bound by rules. Were he were the 100% owner of the bank and answerable only to himself, he may well act differently.
Clock-in, clock-out, don’t get fired, take the money, climb the slippery pole to the top of the organisation. This attitude is all too common in the business world and of course encourages over cautious legalistic behaviour. This makes our large companies cold machine like institutions rather than vibrant flexible life giving organisms benefiting customers and employees alike.
I am generalizing in so many ways here but hopefully you get the point.