This breakingviews column just can’t seem to make up its mind how to back up its assertion—perhaps because that assertion is so faulty.
Robert Cyran and Rob Cox argue that legislation isn’t needed to bring democracy to public companies in the form of boosted shareholder rights—a position that’s laughable on its face.
But what’s really amusing is watching them twist themselves into knots trying to argue this position. Because some companies are letting shareholders hold advisory votes (which are, after all, essentially meaningless) on executive compensation, that means a law forcing all companies to have such votes is bad.
And since the SEC might allow shareholders to nominate board directors, then no law is necessary. Butt out, Congress!
But then:
By all means, legislators should support moves to improve shareholder democracy.
“By all means” would presumably include legislators making laws, no?
Well, no—not to breakingviews, anyway:
But mandating through legislation simply transfers decision-making, and accountability, from company-owners to Congress.
Which, breakingviews then goes on to say, is wrong.
Huh?
These guys are smart enough to know by now that depending on corporations to do what they ought to do is a fool’s game. This is old-guard thinking, confused at best.
Breakingviews likes to present itself as the voice of reason—an Economist-like, we’re-so-sensible/smart-how-can-we-be-wrong? tone. These kinds of breakdowns in logic puncture that image, to say the least.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.