17 April 2009

Corporate governance for stewardship rather than growth

The model of the public corporate manager could begin now to evolve into a reverential style of businessman. Once a corporation, a corporate person, has achieved oligarchical status it needs to become mature in its outlook and to govern its conduct by a code of honor that recognizes its responsibilities for stewardship and not only for growth.

The reason the corporate trustees of the big business companies are unable to control the compensation packages of their executive management is because the mandate for the corporation is out of whack. When a company becomes too big for others to compete against it its objective should become stewardship rather than the maximizing of anything, least of all 'growth.' So long as the corporation keeps trying to grow in an environment where growth is impossible, it will keep trying to engineer that growth artificially. Because the corporation does not see itself as a steward, the top managers have stopped seeing themselves as stewards and instead are using their positions to cash out the corporation, at the expense of the long term interests of the shareholders.

The governance boards must turn to stewardship as the corporate objective. Once that's done, the mandate to the executives will be to maintain competitive position and to transform the corporation into a leader for the good grace of God's apportionments. Having a mandate for stewardship on the outside, the top managers will once again be able to justify their responsibilities for stewardship on the inside.

A mature, fully grown adult who tries to simulate youth and to behave according to the dictates of adolescence is an embarrassment. It's like middle-aged women wearing mini-skirts or middle-aged men driving flashy sports cars. They haven't grown up. They haven't recognized the new stage in their lives and in their positions. They are trying to stay forever young rather than maintaining their vitality through stewardship and by passing along their energy and power to the next generation.

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