Churchill's Horses and the Myths of American Corporations: Power, Stakeholders, and Governance

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Greenwood Publishing Group, 1998 - Business & Economics - 217 pages
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The large public corporations powering the U.S. economy-Churchill's Horses, in Bogie's metaphor-are underachievers, and all of us are paying the price. Why? The reasons are shrouded in the myths that these corporations use to mask their great power and disguise the interests it serves. Myth: the shareholders who own a public corporation control it by electing the directors who govern it. Anti-Myth (fact): shareholders of a public corporation don't elect the directors, and the directors don't govern the corporation. Shareholders don't even own the corporation in any meaningful sense of the word. Yet Churchill's Horses spend billions propping up the current price of their shares rather than invest the money in their (and our) future prosperity. Using many voices from current and recent business literature, Bogie leads you through myths and anti-myths to understand how public corporations have lost focus and ignored their most important stakeholders. Few readers will emerge with all their assumptions and beliefs intact.

 

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Contents

Corporations Are Nothing More or Less Than Their People
7
Public Corporations Are Just Private Corporations with Many Owners
13
The Owners of a Public Corporation Control It by Electing Its Directors
19
The First Concern of Public Corporation Management Is Shareholder Value
25
Corporations Maximize Shareholder Value by Maximizing Current Profit
33
Corporate Profit Is the Best Measure of Real Shareholder Value
39
Corporate Profit Is Owned by the Shareholders Who Own the Corporation
45
Corporations Exist to Maximize Shareholder Value
50
CEOs Are Paid What Theyre Worth
115
CEO Compensation Is Linked to Corporate Performance
121
CEOs Devote Full Time to Managing Their Corporation
127
Public Corporations Are Proficient at Motivating Their Workers
135
Corporations Stay Competitive in a Global Economy by Downsizing
140
Corporations Have to Lay Off Workers When Business Is Bad
145
Raising Productivity Benefits Workers by Raising What They Earn
151
Wall Streets Primary Function Is Raising Money for Public Corporations
159

Corporations Engage in Marketing to Satisfy Their Customers Needs
59
Corporations Invest in Brands to Increase Consumer Value
64
Corporations Are Required by Supply and Demand to Charge Their Lowest Prices
69
Corporations Innovate to Satisfy Their Customers Needs
75
Corporate Management Is Entrepreneurial
83
Corporate Management Is Strategic
88
Professional Managers Can Run Any Corporate Business
94
Corporate Management Is Strong Because Its Team Management
100
In Public Corporations the CEO Is Controlled by Independent Directors
109
Investment Bankers Serve the Interests of Clients and Investors Simultaneously
165
The Market Is a Level Trading Field for Public Investors
171
Wall Streets Influence on Public Corporations Is Beneficial
177
We Are All Consumers We Are All Workers
183
Table of AntiMyths
187
Notes on Sources
191
Selected Bibliography
209
Index
211
Copyright

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Page 9 - Through size, corporations, once merely an efficient tool employed by individuals in the conduct of private business, have become an institution — an institution which has brought such concentration of economic power that so-called private corporations are sometimes able to dominate the state.
Page 1 - For the great enemy of the truth is very often not the lie — deliberate, contrived, and dishonest — but the myth — persistent, persuasive, and unrealistic.
Page 17 - For most of these persons are, in fact, largely concerned, not with making superior long-term forecasts of the probable yield of an investment over its whole life, but with foreseeing changes in the conventional basis of valuation a short time ahead of the general public. They are concerned, not with what an investment is really worth to a man who buys it "for keeps...
Page 7 - A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law. it possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence.

About the author (1998)

MORD BOGIE is a consultant, former lawyer, U.S. foreign aid official, and corporate executive with business experience on five continents. He graduated from Princeton in public and international affairs and, after service in the Marine Corps, from Harvard Law School. He lives with his wife, Sharon Nickles, a computer consultant, in Beacon, New York. This is his first book.

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