From here:
The Archbishop of Canterbury has criticised energy companies for imposing huge price rises that will hammer struggling families.
Justin Welby said power giants had a ‘massive’ moral duty beyond squeezing customers for maximum profit, and challenged the firms to justify their huge increases in bills.
The Archbishop, himself a former oil executive, said he understood the anger over apparently ‘inexplicable’ rises and called on the companies ‘to behave with generosity and not merely to maximise opportunity’.
Whatever next? Justin Welby exhorting the Anglican Church of Canada ‘to behave with generosity’ and stop suing congregations and individuals in order to acquire their assets? Probably not.
If this is the best a former CEO can come up with his country is doomed. Not everyone pays their bills. His country is being flooded with massive uncontrolled immigration and each individual is entitled to benefits. Guess who pays?
I’m not sure how immigration is related to this topic. Perhaps Sandy can further elaborate on the connection.
With regards to Welby’s statement, I applaud it. Milton Friedman’s argument of “maximizing shareholder value” is no longer accepted in today’s world as we expect corporations to also be good corporate citizens (even Forbes magazine agrees). I can’t imagine that any company today would argue against corporate social responsibility or sustainability. Reminding corporations of this every once in a while is not a bad thing.
My concern here with Immigration is the numbers. The indigenous peoples of the European peopled countries have kept their numbers constant. The churches and government desire increased growth so they import people from “the third world.” Most of these people have nothing and possess no skills. They can’t be expected to live in fields so they are given houses and the corresponding amenities.which all has to be paid for. The bill falls on the long suffering disappearing middle class. who have to pay the “huge price rises that will hammer struggling families.” And you ain’t struggling if you are being given everything on a silver platter.
This is fine but this is not what the post above is about….and you are making some unfounded stereotypes about people from other nations.
Regardless, your argument is actually very compatible with Welby’s. Welby is saying that the wealthy are benefiting too much while you are saying that the poor are getting too many benefits. But you both are saying that the middle class are getting the squeeze when it comes to additional costs.
It’s the politically correct thing to say the “…argument of “maximizing shareholder value” is no longer accepted in today’s world as we expect corporations to also be good corporate citizens.” But this ignores reality. When I look at the statements for my mutual fund investments the only things that are reported are the values of my investments. Absolutely no mention at all of anything that would be called “good corporate (citizenship)”. Investors, whether they be individuals, mutual funds, or pension plans, are mostly, almost exclusively, interested in maximizing their profits. Businesses fully realize this and the pay structure for management reflects this. There are a few examples of some corporations that give a small bonus for meeting certain environmental (or other social) goals. But such bonuses make up such a small part of a managers pay as to be insignificant or even meaningless. The higher up in management the greater part of a persons pay is made up of “performance measurements” (for things such as production quantities and cost reductions) and also share options (which have a huge effect of tying a manager’s total compensation to the overall profitability of the corporation).
I can also tell you, as I am currently in the final stages of earning my accounting designation as a Certified Management Accountant, that there is still a huge emphasis on maximizing shareholder value. So much so that it is practically an obsession.
So I guess a better response would be then to ensure that corporations live up to their stated commitments if they claim to uphold corporate social responsibility (csr) as a value. For corporations that do not have any stated commitment (which is likely the minority), I would think that Welby’s call is needed to be heard even more.
And I agree that the accounting profession has historically been focused only on shareholder wealth but this is changing as I believe that the new CPA designation requires a course in csr (see the strategy & governance section).
In any case, I think that we can agree that the movement is away from only maximizing shareholder wealth to also include broader societal goals… even if some sectors are slower at incorporating this than others.
If a business (be it a corporation with publically traded shares or other type of business entity) even has a “csr” value within its value and/or mission statement than how would you propose it be enforced? Within our political & economic systems there are really only two methods. One is legislation the other is shareholders voting in new members to the Board of Directors.
We have seen legislation used in that past and with good results (i.e. minimum wage laws, health and safety regulations). There is a cost to such measures that cause our Canadian businesses to be at a competitive disadvantage when competing against foreign businesses that are not subject to the same or similar laws. But if we as a people say to our politicians that we accept this consequence than that is how it should be.
Shareholders voting in new Directors. Sorry but I do not this happening.
Laws help but this is not needed. The same goes for new directors. Public opinion is changing. People often choose companies that are good corporate citizens. An example of this is in the news today with McDonald’s and a call for them to be more concerned in its egg producers operate. Similarly, public pressure has forced Walmart to be more environmentally conscious. Because of this, Walmart is now seen as one of the most environmentally aware corporations in the globe (its social practices could use some changing though). No law is forcing either of these companies to do these things. It is public pressure and calls for them to think beyond their own shareholders and realize that there are other stakeholders that they need to be concerned about. Welby’s call has much Biblical support: the Bible tells farmers to leave some crops in the field for the poor (think Boaz), there are numerous verses about taking care of the poor and widows at both a personal and corporate level, Acts 4: 32-35 has some challenging words and one of God’s earliest charges to humanity was to be good stewards of his earth. I think that as Christians, we are compelled to do what Welby is doing.