[EM] Public elections are the ones that matter.
Abd ul-Rahman Lomax
abd at lomaxdesign.com
Sun Nov 13 16:58:56 PST 2005
Mr Armytage has written pretty much the same as I have written many
times on this subject.
However, it is not necessary to require corporations to accept
delegability of proxies. This is where the Free Association concept
could come in. If the shareholders of a corporation form a Free
Association, they could implement, in that association, a delegable
proxy structure. If they do this, they would have created a structure
that is what I call trustworthy-by-design (assuming that people
understand that it is best if they appoint proxies whom they
personally trust and with whom they can directly communicate; this
latter requires, largely, appointment of proxies on a relatively
small scale; one person serving as a direct proxy for many thousands
of members may not be able to handle the communication traffic. But
if direct proxies are relatively limited, there is no need to limit
What does this Free Association do? One obvious function would be to
facilitate shareholder cooperation in hiring experts to advise the
shareholders, as well as proxies to serve as the instruments of power
in corporate governance. It is not necessary that the corporation
recognize proxy delegation if the members can collectively agree on a
set of official proxies which represent them. If all the shareholders
agreed, this could be one single person, but, more likely, subgroups
would name their own proxies.
As is typical of how FAs would operate, FA deliberations would
produce recommendations for shareholder action; these recommendations
would be communicated back to the individual shareholders either
directly or through the proxy structure; the latter is important
because the proxy structure is human, person-to-person contact.
With such an organization, even if it did not enjoy as members all
the shareholders, shareholders could collectively exercise substantial power.
And, once such an organization existed and reached a certain critical
size, such that its availability became common knowledge among
shareholders, there would be no reason for a shareholder *not* to
join it. It either would cost nothing or the cost would be trivial
compared to the value of the investment at risk; special projects --
such as hiring auditors -- would cost money but would be funded
separately, only by those who wished to participate in them.
This is the point of the FA concept; FAs have the characteristics
they do precisely to make the organization itself as
non-controversial and open as possible. People who are threatened by
shareholders actually taking charge of the corporations they
supposedly own will try to create controversy, will claim this or
that about the FA, but those who actually understand what the FA is
doing will see through that.
FAs would *never* advocate the overthrow, for example, of existing
governance. *However*, caucuses of FA members might do so.
At 03:00 AM 11/13/2005, James Green-Armytage wrote:
>Dave Ketchum <davek at clarityconnect.com> writes:
> >Corporations are off in their own corner - each share of stock owns a
> >vote, to be voted by its owner.
>Yes, of course corporations officially work on a one-share-one-vote basis,
>and often allow for proxy votes, but in my opinion a robust delegable
>proxy system could go a long way toward improving corporate governance.
> >From the current draft of my delegable proxy paper (at
>Many corporations allow shareholders to vote by proxy, but in many cases,
>shareholders do not know much about the proxies whom they designate. If
>corporations were required to allow for delegable proxy voting, then I as
>a small stockholder could potentially delegate my votes to nonprofit
>organizations that shared my values with regard to corporate policy. (I
>should retain proxy vote rights even if my ownership of stock is brokered
>by an intermediary agent.) This could help corporate policy to conform
>more closely to the values of ordinary citizens, just as the general
>proposal could help government policy to do the same. Hence, the use of
>the delegable proxy system could bring us closer to both political and
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