TAMING THE
CORPORATIONS
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"Taming the Corporations” (ISBN 1-902384-09-1)
written by Austin Mitchell MP and Professor Prem Sikka (University of Essex)
provides evidence of systematic abuses of corporate power in virtually
every
sector of the economy.
Unchecked corporate power is harming people and is bad for
democracy.
Evidence of corporate power is not hard to find. 51 of the World’s
biggest
economies are corporations and 60% of the world’s trade consists of
internal
transfers between 200 companies giving them enormous scope for tax
avoidance,
flight of capital, job shedding and holding elected governments to
ransom.
Companies control almost everything ranging from food, health, water,
medicines, news, entertainment, savings and pensions and exercise more
power on
our daily lives than any elected government.
Companies have abused their power, as evidenced by mis-selling of
pensions,
endowment mortgage and various financial scandals. By putting profits
before
people, companies have inflicted Thalidomide, BSE, vCJD and smoking
related
diseases on millions of people. Electricity, water, gas, telephone,
oil,
railways, banks, supermarkets and credit card companies have little
hesitation
in abusing customers, shareholders and creditors. Department stores,
drug
companies, auction houses and accountancy firms have operated cartels
to fleece
customers. Due to lavish fat-cattery at the top and low wages at the
bottom,
income inequalities have deepened leading to social exclusion and
poverty for
millions of people. Tax avoidance by major companies is rife and Britain is losing more than £100 billion in
tax revenues
each year.
Episodes such as Barings, BCCI, Maxwell, Enron, WorldCom, Parmalat,
Transtec, Versailles, Polly Peck, Equitable Life, Wickes,
Wiggins, Resort
Hotels, Slug and Lettuce, Mayflower, RGB Resources, Shell, Hollinger,
Aberdeen
Trust and Guinness have not led to any major reforms. Regulators are
weak and
auditors are ineffective. Corporate governance codes have failed and do
not
give stakeholders any enforceable rights. Successive governments have
been bought-off
and company executives continue to pursue their narrow personal
interests. The
result is an increasing catalogue of abuses and scandals
The monograph contains over 100 proposals for reforms to empower
stakeholders
and bring corporations under democratic control. These include
replacing the
unitary board with two tier boards, stakeholder elections of all
directors, end
to the proxy voting system, limits on the number of jobs that executive
and
non-executive directors can hold and personal responsibilities for the
CEOs.
Major companies need to be regulated by a regulator concerned with
protecting
stakeholders, accompanied by independent regulation of auditors and
inquiries
into current modes of accounting and auditing. It calls for maximum
wage for
company executives, stakeholder votes on executive remuneration,
corporate
manslaughter laws and urges that major corporations safeguard human
rights and
not be able to hide behind current libel laws or confidentiality
clauses. The
monograph contains proposals for dealing with organised tax avoidance
and curbs
on tax haven and the tax avoidance industry dominated by accountants,
lawyers
and bankers. It calls for additional disclosures to enable stakeholders
to
assess corporate conduct. It calls for changes to the democratic
institutions
so that they are more responsive to the concerns of citizens.
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