26/06: SRI Paradox
Category: General
Reply To: benbingham
Lately I have become aware of ironies in SRI discussions on the virtues of private versus public corporations. Everyone is jumping onto the private bandwagon, hedge funds and all. Meanwhile I have a thesis: public corporations will have to become good citizens over time, and the public does not believe this. Some observations:
My research assistant just admitted her prejudice that private companies are inherently good and public corporations are inherently bad. Understandable, but ironic since public entities are more regulated and private companies are far more able to avoid scrutiny.
In the Financial Times this week, it was stated that Moody’s may downgrade corporate bonds when corporate governance is “improved” by allowing more shareholder representation. Their reason: private (private!) groups could force the corporation to make decisions based on short term gains rather than long term value creation!
This morning on NPR I heard something about Congress accusing the SEC of favoring business interests…hello. So one day perhaps the regulators will uphold all the stakeholders’ interests. By investing in good public companies Benchmark is supporting the possibility that one day public markets will benefit the public good. Private does not mean good anymore than public means bad!
G. Benjamin Bingham
June 26 2007
My research assistant just admitted her prejudice that private companies are inherently good and public corporations are inherently bad. Understandable, but ironic since public entities are more regulated and private companies are far more able to avoid scrutiny.
In the Financial Times this week, it was stated that Moody’s may downgrade corporate bonds when corporate governance is “improved” by allowing more shareholder representation. Their reason: private (private!) groups could force the corporation to make decisions based on short term gains rather than long term value creation!
This morning on NPR I heard something about Congress accusing the SEC of favoring business interests…hello. So one day perhaps the regulators will uphold all the stakeholders’ interests. By investing in good public companies Benchmark is supporting the possibility that one day public markets will benefit the public good. Private does not mean good anymore than public means bad!
G. Benjamin Bingham
June 26 2007
