[EM] Public elections are the ones that matter.

[Abd ul-Rahman Lomax]

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 
indirect proxies.

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
>http://fc.antioch.edu/~james_green-armytage/vm/proxy.htm ):
>
>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
>economic democracy.
>
>my best,
>James
>
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