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Don't forget how stocks motivate corporations 

Pismo Beach

Kudos for the good opinion piece by Jim Duenow (“Beware of the soulless corporations,” April 28). I can’t disagree with his fundamental points, but would like to add a couple of my own.

Corporations may be inherently amoral, but the people who run them are not necessarily so, even though they’re legally expected to be that way. Some try to be moral (in a broadly accepted definition) and do so to the extent that they can without hurting the bottom line.

Few actually enjoy shafting others enough to be considered immoral.

This point doesn’t negate Duenow’s arguments for closer regulation of corporate activities, a need for revision of corporate “personhood” status, and more severe penalties for illegal and abusive practices by corporations in search of higher profits. But there is another factor that forces even the corporate execs with good intentions to do things that hurt society, and this needs to be addressed, too.

The structure of our stock market places far too much emphasis on “short-term” profits. Only companies without major competition (or with minimal outside investment) can afford to think about long-term investments—unless they can make a real convincing case to stockholders that such developments will pay off bigger. If they don’t, the corporate raiders of the financial community will stage a “stockholder’s revolt” or takeover and proceed to dismantle any portion of the company that is not oriented toward profits now. This places additional pressures on management beyond maximizing profits by ignoring ethical operating practices.

I lack the knowledge to propose a detailed solution for this problem, but I would think that maybe a new class of stocks could be created with government-imposed restrictions on executive compensation and take-overs. It could also include other operational practices that are socially harmful. This would remove incentives to run companies with an eye only to the immediate profits.

It might also encourage those of us who currently have little trust in Wall Street or the upper levels of the financial community to invest more. Let those who like to play the money games for short-term profit do so, but let’s openly label it as the high-risk gambling it is and give those with better intentions a chance to show that social benefits can come from a more stable and conservative form of corporate capitalism.

-- Ron Holt - Arroyo Grande

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