Bruce Bueno de Mesquita argues that occupying a park will never reform Wall Street. The right approach, instead, he says, is to change the system from within. That means shareholders should not give their votes away to corporate proxies, but coordinate together, because shareholders “do have the votes to control outcomes.”
Bruce Bueno de Mesquita: Let me elaborate on how these rules apply, for example, to corporations, publically traded corporations. Many of us have the sense that the Wall Street bankers are tone deaf. How could they be giving billions of dollars in bonuses when the taxpayers have bailed them out, the economy is suffering, millions of people are unemployed? Well people who say that are confused about how governance works.
Let’s look at how a corporation works. Well we the people certainly are not the ones who get to decide whether the CEO keeps his or her job or not. The shareholders, except under unusual circumstances, are not the folks who get to decide. The folks who get to decide are senior management, the people right under them and the board of directors. They are the folks who get the bonuses because they are the folks who keep the leadership in office.
So if one wants to change how corporations work, occupying Washington Square Park is probably not going to do it but organizing shareholders on, for example, the equivalent of a Facebook page for each individual corporation where shareholders can coordinate without any great expense to themselves and organize their own proxy battles, why that would make a difference in corporate governance because they do have the votes to control outcomes. It’s just that the shareholders give their votes away to the corporate proxy because they haven’t organized.
Directed / Produced by
Jonathan Fowler & Elizabeth Rodd