Monday Message Board

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please. If you would like to receive my (hopefully) regular email news, please sign up using the following link


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48 thoughts on “Monday Message Board

  1. Sigh-tation… I’m just the messanger…

    Svante, asking boards if an owner has control of political donations, will imo elicit a standard response ala news corp / rupe “No infuluence”. No mention of virtue signalling / ethical alignment to get the appointment though. So other methods needed to control political donations. (I was going to post “too much dark money in almonds” as a way of showing ‘we’ spend more on almonds than we do on politics.)

    And who set the “if no *individual* owns more than 25% of the company” rule???

    “”GETTING THE UK’S HOUSE IN ORDER

    “Failure to check key information and enforce rules on the UK company register enables criminals and the corrupt to use UK companies to store cash

    “Using the open data nature of the register, Global Witness analysis found:

    – 336,224 companies simply say they have no beneficial owner*

    – 6,711 companies are controlled by a beneficial owner who themselves control over 100 companies, suggesting likely nominees

    – 487 companies are part of circular ownership structures

    – 8,872 companies name another foreign company as their ultimate owners which is unlikely to be listed on a stock exchange.

    * This is legal, if no individual owns more than 25% of the company””

    https://www.globalwitness.org/en/campaigns/corruption-and-money-laundering/anonymous-company-owners/getting-uks-house-order/

    So above around 9% of total effective UK registered companies See text & graphics for circular / fragmented / trusts. Positive note: 40 countries implementing some sort of beneficial ownership laws. Sometime.

    “At the end of June 2019, there were 4,237,994 companies on the total register and 3,964,624 on the effective register. Both the total and effective registers continue to increase in size, although the growth rate has slowed in recent years.”
    https://www.gov.uk/government/publications/incorporated-companies-in-the-uk-april-to-june-2019/incorporated-companies-in-the-uk-april-to-june-2019

    “More beneficial ownership loopholes to plug: circular ownership, fragmented control and companies as parties to the trust

    “Beneficial ownership regulations do usually also require the identification of the person with effective control or influence over the legal vehicle. However, this can be more difficult to do. Those checking beneficial ownership information will most likely find it easier to follow mechanical rules based on thresholds for ownership or voting rights to identify the person with effective control, regardless of whether the rules can truly suss out the person who truly has effective control over a legal vehicle.”
    https://www.taxjustice.net/2019/09/06/more-beneficial-ownership-loopholes-to-plug-circular-ownership-control-with-little-ownership-and-companies-as-parties-to-the-trust/

  2. Some people might say that company directors are supposed to put the interests of shareholders ahead of their own, but I don’t know of anybody who would suggest that people always do what they’re supposed to do. In the great days of leveraged buyouts by management, company directors were not notable for putting the interests of shareholders ahead of their own.

  3. By being simply a majority these foreign majority imperial agent shareholders now own those Australian boards. The boards of course know what is good for their own interests, so they see to the interests of those foreign shareholders. Big multinational direct investors and activist institutional funds managers don’t just sit idly by – even the somewhat passives replace board members now and then with their choice of people who will do what they’re supposed to do, ie., what is wanted. Call it a capital concentration camp. First the capitol then the country. It sucks.

  4. “Australian citizens arrested for protesting that we are not acting appropriately with respect to Anthropogenic Global Warming, especially seeing that it is their future that goes up in smoke.”

    We aren’t warming. But the fires are to do with extra-CO2. Because that leads to greater plant growth and therefore more fuel buildup. Are we really saying we don’t want the extra plant growth? No of course not. This is a public administration problem. It requires us to get goats, pigs, mobile electric fences, and loose wood scavengers, to reduce the fuel. No use pointing at the sky and pretending you see a lot of black stuff when there is serious work that needs to be done.

  5. The boards of course know what is good for their own interests, so they see to the interests of those foreign shareholders.

    You don’t make it true just by asserting it.

    Of course it’s true sometimes that the interests of shareholders and the interests of directors coincide, but when they don’t coincide, why would you expect the directors to put the interests of the shareholders ahead of their own?

  6. “The boards of course know what is good for their own interests, so they see to the interests of those foreign shareholders.”

    The modern giant corporation goes after the interest rate subsidy of the very largest of banks. They are only interested in their creditors. They steal from their shareholders with new share issues and outrageous share dilution salary packages. So they only care about the people who control the banking system. Thats why we have such a thing as “woke capital.”

  7. “why would you expect the directors to put the interests of the shareholders ahead of their own?”

    Why would you expect directors to go against the lawful interests of such majority shareholders? How can they, how long would they last, when they’re only allowed a seat on the board at the pleasure of such shareholders?

  8. ““why would you expect the directors to put the interests of the shareholders ahead of their own?”

    Which shareholders can and would kick them off the board? The profitability of these firms relies on getting cheap bargain basement credit from giant banks. The big shareholders themselves are not individuals, and if they are they are likely to be finance oligarchs anyway. So the big shareholders are mega-big firms themselves, reliant on getting huge amounts of credit subsidy from the self-same money-creation network. So it all links back to the same oligarchs. There would be no such thing as a new share issue if it were the shareholders calling the shots. There would be no stock options as part of anyones salaries. No share dilution. New share issues are proof that shareholder sovereignty isn’t around any more.

  9. Native “shareholder sovereignty” isn’t around much any more on the main asx board, which relates back to the original points that sovereignty of the people has gone with the increase of dark money political donations from native but foreign (US) owned boards.

  10. GB. Sigh-tation please.

    ” We aren’t warming. But the fires are to do with extra-CO2. Because that leads to greater plant growth and therefore more fuel buildup.”

  11. Here is the fix “without major social or political upheaval.”, something Australia seems to be moving away from.

    “Talk to each other

    “We found that active dialogue with communities is key. In North Rhine-Westphalia, Germany, policy is jointly formulated by employees and employers, giving workers a voice which is largely equal to that of industrialists. The proportion of employees on supervisory boards is determined by the number of employees, which means there is one-third employee representation if there are more than 500 employees and parity on the supervisory board if there are more than 2,000 employees. This has meant coal mining has been gradually reduced and now nearly eliminated without major social or political upheaval.

    “In contrast, Hazelwood coal power station and adjoining mine in Victoria, Australia were closed with minimal consultation with unions or government, and after just five months notice.”

    https://theconversation.com/coal-mines-can-be-closed-without-destroying-livelihoods-heres-how-124336

    Chance if this happening in australia…
    5yrs -1% – Labor too ‘vibbly vobbly”
    10yrs – 5% – gerrymander fixed -greens w 10+ seats
    20yrs – 50% – ala science advances one death at a time, new cohort of voters dominant

    JQ, Svante, J-D, what timeframe would you say to having “policy is jointly formulated by employees and employers” in Australia?

  12. Why would you expect directors to go against the lawful interests of such majority shareholders? How can they, how long would they last, when they’re only allowed a seat on the board at the pleasure of such shareholders?

    It turns out in practice that it’s extremely difficult for shareholders to remove directors. It can happen, sometimes, but it’s exceedingly rare. A typical board of directors has a nominations committee, and typically the approval by shareholders of candidates suggested by the nominations committee and endorsed by the board is a mere formality.

  13. Reform political donations, political party and independent financial resourcing, and taxpayer funding of politics appropriately, and anything the polity, the democratic majority actually wants is possible shortly after. it wouldn’t stop with reform of private sector corporate governance structure. All government structures would benefit after such transparent levelling where “one person one vote” actually meant something.

  14. “is a mere formality.”

    Of course it is. You’re conflating the mum and dad shareholder options with those available to the (foreign) majority shareholder. If the fix is in by the powerful players, it is in, and of course it is.

  15. The greater the ponzi money presence the further and further we move away from shareholder sovereignty. So if we were to look into how the situation was circa 1960 we may find a substantial level of shareholder influence. But now its presence must be pretty rare, even just on a theoretical level prior to too much knowledge on the ground.

    My biggest problem with recent neoclassical types, who I assumed that I was one of, is that while they are happy about leaving anyone poor out in the harsh winds of alleged free enterprise, they are even happier about gargantuan welfarism for the financial sector. Thats most of the worm in the apple here. Although corporate law needs a rewrite tip to stern. Ahead of that future rewrite the best things we can pursue are monetary reform, and a rebalancing between the sole trader and the artificial persons. No taxes on retained earnings for the sole trader.

    Back under Bretton Woods we were socialists in theory but in practice we had a great deal of economy in government. That was a pretty sweet and high-performance combination. You come out of that situation you can easily become a right winger. But the basis for being that way is severely degraded. The big end of town were really doing good things for your average bloke back then. Now they strike me as completely useless, outrageously greedy, and not even very bright.

  16. You’re conflating the mum and dad shareholder options with those available to the (foreign) majority shareholder.

    How many publicly traded companies have a majority shareholder? Some, obviously, but what percentage?

  17. Not necessarily just the one shareholder. Not one economic hitman. Think of common origin, common perspective, common beneficiary interest, common alliance controlled groupings. The Clinton Fernandes article reveals the huge extent of US foreign ownership super-majority dominance over blue-chip Australian listed companies and, due to the size and business activities of those, by implication most other listed and probably most unlisted companies of any size. Think banana republic target Australia. Jackie Cogan summed it up – “America’s not a country. It’s just a business.” – and Australia is now just another US Inc mark.

  18. “Think of common origin, common perspective, common beneficiary interest, common alliance controlled groupings. ”

    But in doing so lets no diminish flat out conspiracy. Its a mental handicap and a logical fallacy to be biased against conspiracy. Its about as stupid as a man can get to be averse to that possibility.

    Generally speaking its artificial entities owning artificial entities. Because an individual sterilises his income from taxation that way. If you take Apple Computer, I heard a rumour that the second biggest shareholder at one stage, after Steve Jobs, was David Rockefeller. But how would you confirm such a thing behind a maize of trusts? You could confirm it but it would take a lot of work.

    Since the oligarchy gets a chunk of the benefit from new money creation, the international drug trade, arms dealing and other happy undertakings of the subhuman type, ultimately they’ll end up own almost everything, which I suggest they do already. And most of the rest of us will be serfs, which I suggest 90% of us are already.

    So you can fall in love with the Misean/Rothbard/Reisman economic models. And it would be a beautiful world if they worked as advertised. But there needs to be radical change before they even come close to doing so. And it means for hundreds of years having a taxation regime that is easy on most of us but completely decapitates dynastic wealth. Not by way of inheritance tax, or income tax. These are ridiculously crude measure. But by undermining lazy wealth and artificial persons on a daily basis.

  19. Not necessarily just the one shareholder. Not one economic hitman. Think of common origin, common perspective, common beneficiary interest, common alliance controlled groupings.

    Again it should be obvious (it certainly is to me) that there are publicly traded companies with no one majority shareholder which are nevertheless controlled by a group of allied shareholders who hold a majority between them and can therefore direct the company’s affairs (and its board, although in such case the chances are they’ll be on the board). One routine scenario would be where a family controlled the business before it went public and family members still hold a majority of the shares. (Of course family members don’t always remain allied, but often they do.)

    The question is, again, what percentage of publicly traded companies follow this pattern?

  20. See if you can find one example of a really big company so constructed? There will be a few medium sized companies as you describe. Yet when I was trading shares for a couple of years, maybe about ten years ago, I was only buying the small guys. And they were constantly dudding the minority shareholders with share dilutions. So I would say in 2019 at least that shareholders as owners amounts to a fantasy. Our wishes are not taken into account, as no minority shareholder would ever want these bludgers showing up to three or four meetings and getting a years pay out of it. Nor would we choose the sort of people who get seats on these boards.

  21. In what circumstances do you think the parties involved would make their arrangements public? It’s been a notably quiet takeover. Even the comprehensive extent of the takeover available from public share registers hasn’t been reported until now, nor the consequent huge foreign interest controlled dark political funding opportunities.

  22. In what circumstances do you think …

    I’m going to explain what I do think, and then I’m going to explain why I think that.

    What I think is that in the typical publicly traded company, the chief executive officer has far more influence over the way the company is run than anybody else, the members of the board have some influence but not much, and the shareholders have next to none.

    I conclude that the CEO has far more influence than the board partly on the basis of the obvious observation that the CEO works full-time at running the company whereas the directors are part-time, partly on the basis of what I’ve read about the operations of corporations, and partly on the basis of my own direct observations of board and committee meetings (not in publicly traded companies, but in other organisations with volunteer boards/committees but full-time executives).

    I conclude that shareholders have next to no influence partly on the basis of what I’ve read about the operations of corporations; partly on the basis of the reasoning that if there were a group of people who had access to enough funds to buy up a majority shareholding in a publicly listed corporation and who also had a shared concept of how they wanted a business to be run, it would be easier and simpler for them to put the funds into setting up their own business and avoid having to deal with legacy issues; and partly on the basis of the reasoning that shares are and always have been primarily a form of investment, which means a way of making money, so that shareholders are primarily interested in making money and that therefore if they are satisfied with their financial return they are unlikely to be interested in intervening in how the company is run, while if they are dissatisfied with their financial return their likeliest remedy is to sell their shares and invest elsewhere.

    I mentioned before that I acknowledge that in some cases a majority of shares in a publicly listed company will be held by a small group of connected and allied people, who are then likely to appoint a majority of board members from among themselves or those very close to them and so control the direction of the company. However, I also reason that over time it is likely that people will be motivated to sell out either because they need the money for immediate purposes or because they perceive preferable investment opportunities elsewhere, and further that over time the members of such a small group are likely either to fall out or (given time) to die and be succeeded by heirs who don’t share the same connections and alliances: therefore, over time, companies which started out controlled by a small group of allied shareholders will cease to be so. The conclusion of this reasoning is further supported by the observation that there are many publicly listed companies which started out as family-controlled businesses but which are no longer controlled by the founding families.

    I don’t know what percentage of publicly listed companies are controlled by small group of allied shareholders, and I don’t know of any way of finding out. On the basis of the reasoning outlined above, I suspect the percentage is small. I would be prepared to change my mind about that on the basis of evidence that the percentage is high. You seem to be telling me that there’s no way of getting hold of such evidence. If you can’t produce evidence for your conclusion, there’s no reason for anybody else to accept it.

  23. “…partly on the basis of my own direct observations of board and committee meetings (not in publicly traded companies, but in other organisations with volunteer boards/committees but full-time executives).”

    ‘Nuff said.

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