When my children were young I used to read them a story written in verse about
a bright yellow rope. It describes a young boy, Sylvester, who finds a yellow rope
on the road and immediately comes across someone who’s wagon has fallen in a ditch.
The boy then introduces the chorus:
Hi there, friend, you sure have trouble.
I’ll help you, as quick as a bubble.
Take my rope.
Yes, you can keep it.
Pass it on when others need it. (The Bright Yellow Rope, John Houston,
1973).
The story goes on to describe how each person in turn helps another with the rope,
giving it to them with the same chorus. In the end, Sylvester himself finds himself
in trouble and, sure enough, the current owner of the rope helps him out and gives
the rope back to him.
I liked reading this story to my children. It’s a fun story and they liked hearing
it. But I also liked reading it because it was another way of instilling in them
a value I hold dearly – you get more out of life by giving to others than
you do by trying to keep everything to yourself.
I know many of my friends, colleagues and acquaintances feel strongly along similar
lines. Many of the people I know who hold senior positions in large corporations
or sit on the boards of those corporations live out similar values in their personal
lives.
However, we seem to live in a world where it has become almost illegal to bring
a spirit of generosity into the management or direction of our public corporations
because doing so would violate what has become the most sacrosanct value in business
today – ‘corporations exist to increase shareholder value’. Donations to
charity can only be given if the directors or managers can show a direct likely
return to the company, and through it, the shareholders. Loyalty to employees
is a cost to shareholders and can’t be tolerated. Employees are kept in the company
only as long as no cheaper alternative is available. Finally, profit reigns supreme.
If a company knows a way to increase profit, it has a responsibility to its shareholders
to do so without regard to any social consequences that may follow.
I fear for a society in which our largest and most powerful institutions are based
on such principles.
Corporations are citizens just as much as you and me . We compete for resources,
our actions impact on each other and we both leave a material legacy for the generations
that will follow us on this planet.
However, as individuals we learn social norms from an early age. In addition to
helping those in need, we are taught to tidy up after ourselves, not to take more
than our fair share, to let the other person go first, to treat others with respect
and dignity and to stand for justice in the world.
The principle of shareholder value, as it is often represented, appears to me
to be an attempt to exempt one class of citizens – namely corporate citizens
– from these norms and values. Values without which social organisation
would not be possible. I would go further and argue that shareholder value at
its core is a veil behind which individuals seek to exempt themselves from the
norms that society imposes on them and thus gain advantage over their peers. At
its worst, as we saw at Enron, this is just an adult version of
the child who takes the whole cake for themselves at a birthday party and cares
nothing for the others who are left with none.