Business Comment: Pressure groups have their uses
Thursday 15 May 1997
The affair has raised a number of broader corporate governance issues. In the City, and to some extent at Shell, it became seen as an issue of principle about the board's right to manage. It is not the place of shareholders, the argument goes, to dictate to the board its policy on human rights and the environment, just as it is not the place of shareholders to dictate to the board on employment policy or the finer details of investment strategy. These are matters for management. In the event of poor or cavalier management, markets can properly exercise control either by clearing them out, or by depriving them of capital.
In the real world, however, nobody, even in the City, really believes in applying this rigid separation of ownership and management rights. Big institutional shareholders often become actively involved in management issues, if only by encouraging executives, sometimes through non-executives, to do certain things and discouraging them from others. The argument used by campaigners in this instance that there is a very good business case for applying the highest environmental and human rights standards is only a more broad-brush version of the same thing.
In truth, it is actually a thoroughly good thing for managements to be held to account for their actions over a wide range of different issues and practices. The chief executive of a large multinational possesses a form of absolute power which goes way beyond that of a government minister or official. Most of them exercise it responsibly, but it ill becomes these very highly paid people to complain about the usually legitimate concerns of campaigning pressure groups, or their increasingly effective attempts to hijack the ordinary rubber-stamping business of company meetings. Managements are unaccountable enough already. Attempts to make them more so, even by sometimes misguided and ill-informed pressure groups, are only to be applauded.
- 1 Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
- 2 To help fuel their propaganda machine against the poor, our government has now decided to redefine the word 'welfare'
- 3 Bill Cosby: Isn’t it obvious why his accusers have stayed silent up until now?
- 4 Halle Berry takes ex-boyfriend Gabriel Aubry to court for allegedly trying to make daughter look less African-American
- 5 Isis propaganda image showing 'abuse of Muslim woman by soldiers' is actually taken from Hungarian porn film
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
Ferguson decision: Tea Party website mocks Michael Brown's family over T-shirt typo
Michael Brown shooting: Ten things we know – or know better – now the Ferguson grand jury's work is over
Isis propaganda image showing 'abuse of Muslim woman by soldiers' is actually taken from Hungarian porn film
Derren Brown on the disappointment of coming out: 'It’s not that people react badly to it – they really don't care'
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
Rochester by-election: Labour MP Emily Thornberry resigns after posting white van and England flags tweet
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Revealed: How the world gets rich – from privatising British public services
Exclusive: UK approved £7m Israeli arms sales in six months before Gaza conflict
iJobs Money & Business
£Attractive: Citifocus Ltd: High calibre individual with significant product d...
£Negotiable: Citifocus Ltd: Leading global bank seeks experienced credit analy...
£Attractive Package: Citifocus Ltd: High calibre individual with a high degree...
£Attractive: Citifocus Ltd: High calibre individual with superior academics an...