Corporate Governance

On Corporate Democracy is a Myth...

Dan writes...

Carl, I think we have a great opportunity in this election year to take back our boards.  Why dont you set up some form letters on your site here that can email specific congresspersons our views?  Your bully pulpit and the current environment may be the combination we need to get this done.  Thanks for all you do.

Answer: Thanks for the suggestion. That could be a good idea and crosses over into what I've been talking about. We intend to put out petitions and form letters.  I want a ground swell. I want people to subscribe. I believe something can be done in Washington.

Leslie writes...

I think it's great that you have decided to do this blog.  Before I get into really discussing my feelings on the subjects, how do we know that it is indeed you, Mr. Icahn, who will be participating?

Answer: It's me. I?m taking this blog seriously. I intend to spend some time with you on this blog so that we can make a difference in corporate America. I hope we will change the course of corporate governance in this country.

Dinoff writes...

I find this comment very disturbing:"...The lack of competent leadership makes our companies less competitive day by day, causing an upward spiraling trade and current account deficit, as well as a near meltdown of the financial sector. The buildup of incompetent boards and managers is the result of poor corporate governance. Poor corporate governance now threatens more than just potential shareholder value; it threatens this country?s very economic survival. ..."

Really? So, outsourcing jobs to other countries doesn't hurt economic survival?

It's not always about the money Mr. Ichan. Sometimes, the CEO not only has a right to the shareholders who invest in the company, but to the hard working men and women who make the company by building the products, marketing the products, the people selling the products, etc. etc.  Do I agree with the pay? No! I do believe that CEO's are paid WAY to much for basically "overseeing". CEOs of companies generally have VPs, Senior VPs, Junior VPs, Executive VPs, etc. etc. that actually do more work in their respective departments than the CEO. Why should a CEO get millions & millions to be a glorified "watchdog"? But sometimes, just sometimes, a CEO's worth is more than the money you give him!

Sorry, that's just my two cents!

Answer:  The point is that because the CEO is incompetent- the company becomes ineffective and employees lose their jobs. When you look at our financial services the workers were fired and the CEOs got huge severance. Is that what you want? This is what I?m fighting against!

Outsourcing at times is necessary because labor intensive industries are expensive. A major reason we have to outsource is because our companies have become so ineffective that we have to outsource in order to get anything done!

On The Absurdity of the Staggered Board...

Renegade writes...

If a majority of companies really have bad corporate governance like staggered boards, increasingly dumber CEO's etc. wouldn't it be easier for society as a whole to resolve this issue by having shareholders dump the stock instead of getting the "authorities" to regulate corporate governance. The way I see it this is more of an investor awareness & education issue than regulation by the government. No one forced an investor to buy shares of a company with bad corporate governance. If a majority of investors invested mostly in companies with good corporate governance thereby rewarding them and punishing the rest by implication, then you would have mostly companies with good governance surviving and the rest perishing.

Problem is not many investors (especially retail) look into corporate governance when making an investment choice. When you invest in a company you are also investing in it's corporate governance, management etc. which is usually pretty well laid out in its public filings. It's another matter that it's very difficult for ordinary investors to go through public filings to get the essence of all these issues.

Now if only some products/services could bring in greater transparency into the system with objective information about a company's corporate governance etc. in an easy to digest format and investors start recognizing the importance of these as opposed to analyst ratings the whole issue arround corporate governance could be self-policed by the market - may be the next step in the evolution of the financial market, but can't really see this issue bringing down the whole economy.

Answer: This is the old cliché 'dump the stock.' To me, this is the not the solution but rather exactly what is wrong with corporate America. By the dumping the stock, you?re allowing the terrible CEO to stay and milk the company dry! This is ridiculous. That is a waste of the company?s valuable assets. When I find a company like that I buy its stock and fight for change. I?d rather attempt to fix the company up than allow for its continued disintegration. Your comment that ?this is more of an investor awareness & education issue than regulation by the government,? is off base. It is the rules established by the government, like aspects of state corporate laws and related court decisions, that have skewed the election process in favor of management and allowed them to entrench themselves. I want government to undo what it has done so that shareholders can freely exercise their rights as owners and disallow bureaucratic managers who have lobbied their way into becoming a protected class.