By Scott Reed
Occupy Wall Street: Most of you should have heard of this movement by now. It is a protest that began in Liberty Square in the Wall Street section of New York City Sept. 17 and has grown to include more than 100 different cities across the country.
It is a serious movement dealing with serious issues. For the most part, this group has been civil and has illuminated issues that need to be dealt with in our country. From my particular viewpoint, it seems that people from all walks of life have joined together to protest against, for the most part, corporate greed.
I can understand this sentiment. It seems that almost every bad thing that has happened to our financial system in the past few years can be linked to corporate greed in some form or fashion. I am as frustrated and sickened by what I have seen in the past decade as anyone I know. However, the problem is not corporate greed because here is no such thing as corporate greed.
Corporations don’t have emotions. Corporations simply exist under a predefined framework of governance. There is no greed nor is there such a thing as corporate ethics. The framework within which our system is run is the free enterprise system, where corporations are encouraged to move to the most efficient and profitable track. Corporations that don’t move that way cease to exist. Their competitors take over their space and the system moves on.
Greed and moral fortitude come from those who run these companies. A company’s “corporate ethics” can change drastically from one leader to the next, for better or for worse. Lately, it seems like it has been for the worse. However, as much as we want someone to pay for all the bad things that are going on, I am reminded of the cartoon Pogo in which Pogo says, “We have met the enemy and he is us.”
Our corporate leaders have been hired by us, their shareholders. Most companies are so broadly owned, shareholders pay little attention to the prospectuses that are mailed every year requiring them to vote on issues like executive pay, golden parachutes, stock options, etc. We allow executives to act as if they are the real owners of the company we have entrusted them to run, yet they don’t share the downside that real owners share. If the stock doesn’t do well, they can simply vote themselves a raise, and we shareholders will probably approve it without a second thought.
Corporate leaders have learned to do whatever they have to do to make their numbers. That way the stock options they awarded themselves and we voted for will be worth more, at least for the moment. And if the company plays too many games and gets in real trouble, the leaders simply take their golden parachute we voted for and jump ship.
We don’t need to change our free enterprise system. It has proven time and again that it works better than the alternatives. It is the creativity that is born from our system that has kept us on top for so long. We simply need to require more from our leaders. We need to hold them responsible for their actions and we need to pay attention to what they are doing.
Let’s start working on stopping personal greed and we can change the actions of corporations. Changing from within takes much more time and effort and doesn’t really have the allure of camping out in Liberty Square, but it is the only way I know to make a real difference.
Scott Reed, is the CEO of Hardy Reed Capital Advisors in Tupelo. Contact him at (662) 823-4722 or firstname.lastname@example.org.