Although I haven’t followed his career closely Don
Argus has always struck me as a deep and broad minded thinker. There
are other powerful CEOs and chairmen that don’t evoke the same confidence
in their ability to think beyond profit and power. A certain telecommunications
carrier comes to mind in that respect.

Don Argus came to my attention again this morning in this
article [Subscription Required] in the Fin
Review today. In this edited extract of a speech he gave yesterday
to the Australian Institute
of Company Directors Argus argues that the narrow focus on shareholder
interest is misplaced. Certainly shareholders provide the financial capital
for the company to operate, but many (most?) have no long term commitment
to the company. However:

…should shareholders hold sway over strategy and operational implementation
which may force management to drastically change the fortunes of a particular
company. These same shareholders could be gone in the blink of an eye by
selling their shares the next day or even the next minute.

Others with no skin in the game (at least financially speaking) may demonstrate
much longer term commitment and interest (although as Argus points out in
the case of French activist José
Bové that interest may be negative). Employees come to my
mind as a group that provide a certain type of capital without which the long
term growth of the company would be impossible. To expect that we can gain
the commitment we require from this group in return for salary and conditions
is, in my mind, naive.

Regardless, Argus goes on to argue that boards need to take into account,
and balance, the interests of a broad group of stakeholders. A fine balancing
act not doubt, but one that reflects the realities of modern corporate life
— telco CEO take note.