Corporate Governance

  • January 25, 2010

    In his weekly address, President Barack Obama took aim at the Supreme Court's recent decision in Citizens United v. FEC, which, he said, "overturned more than a century of law." To "repair the damage that has been done," the president indicated that, as soon as the ruling was announced, he instructed his administration to work with legislators from both parties in developing a forceful response to the decision.

    "This ruling opens the floodgates for an unlimited amount of special interest money into our democracy" President Obama stated. "It gives the special interest lobbyists new leverage to spend millions on adverstising to persuade elected officials to vote their way, or to punish those who don't."

  • January 21, 2010
    BookTalk
    Goddess of the Market
    Ayn Rand and the American Right
    By: 
    Jennifer Burns

    By Jennifer Burns, Assistant Professor of History, University of Virginia. Burns blogs about Ayn Rand, libertarianism, political history, and more at www.jenniferburns.org

    Of all the second acts in American lives, perhaps none is more remarkable than the recent conservative embrace of Ayn Rand, the long-dead doyenne of American capitalism. During the market nosedive of 2008 it seemed her version of free market capitalism had been discredited altogether; even former acolyte Alan Greenspan had his doubts, famously telling Congress he had found "a flaw" in his Rand-inspired ideology. Yet in 2009 sales of her books began a ferocious climb, with Atlas Shrugged alone selling more than 300,000 copies. Signs referencing her hero John Galt dotted the tea party protests, and she's been a staple of right wing talk radio and a new favorite of rising stars like Glen Beck. On the campaign trail, candidate Obama would sometimes criticize the virtue of selfishness, making a veiled allusion to Rand's ideas. Now President Obama has wrestled firsthand with the virtue of selfishness, for it is Rand's ideas that have undergirded conservative response to his economic proposals from the auto bailout to health care reform. Nor is she likely to fade away anytime soon; the Washington Post just declared Randroids "in" for 2010.

  • January 21, 2010
    Guest Post

    By Bert Brandenburg, Executive Director of Justice at Stake, a nonpartisan, nonprofit campaign with more than 50 partners, working to keep America's courts fair, impartial and free from special-interest and partisan attacks.

    For those concerned about special-interest spending in elections, today's Citizens United ruling was an unmistakable setback. This ruling pours gasoline on an already raging bonfire that will affect all federal and state elections. And it will pose an especially grave threat to the integrity of elected state courts.

    But today's Citizens United ruling does have a silver lining: it explicitly says that corporations that pay to play in elections can be forced to disclose their financial sources. Companies running so-called independent campaigns can literally spend infinite amounts. But they do not have a constitutional right to do so anonymously.

    The ruling thus gives clear guidance to state and federal lawmakers that they can pass disclosure laws, to provide desperately needed sunlight in a new era of runaway election spending. Moreover, it is a hopeful sign that First Amendment attacks, which have been used as a battering ram against legitimate election laws, may have reached their upper limit with the Citizens United case.

    In today's ruling, the U.S. Supreme Court said businesses can spend directly from their treasuries on federal elections-a ruling that could unleash a tsunami of campaign cash. And that's clearly just the beginning. As quickly as they can be cranked out, new lawsuits will demand equal rights for unions-and for spending on state and local elections, not just federal campaigns.

    It's easy to imagine where this will lead, especially for those who focus on the specialized area of judicial elections.

  • January 21, 2010
    Guest Post

    By Democracy 21 President Fred Wertheimer

    Today's Supreme Court decision in the Citizens United case is a disaster for the American people and a dark day for the Supreme Court.

    The decision will unleash unprecedented amounts of corporate "influence-seeking" money on our elections and create unprecedented opportunities for corporate "influence-buying" corruption.

    Today's decision is the most radical and destructive campaign finance decision in Supreme Court history. In order to reach the decision, five justices abandoned longstanding judicial principles, judicial precedents and judicial restraint.

    With the Citizens United opinion, Chief Justice Roberts has abandoned the illusory public commitments he made to "judicial modesty" and "respect for precedent" to cast the deciding vote for a radical decision that profoundly undermines our democracy.

    In a stark choice between the right of American citizens to a government free from "influence-buying" corruption and the economic and political interests of American corporations, five Supreme Court Justices today came down in favor of American corporations.

    With a stroke of the pen, five Justices wiped out a century of American history devoted to preventing corporate corruption of our democracy.

    The radical nature of today's decision can be seen in the fact that the Court is overruling cases decided in 1990, 2003 and 2007, without any changed circumstances to justify these abrupt reversals.

  • January 11, 2010
    Guest Post

    By Lee Harris, professor of corporate law at the University of Memphis and author, most recently, of Mastering Corporations and Other Business Entities.

    Goldman Sachs, the former bailed out investment bank, wastes too much of the corporate wad on lavish compensation arrangements. Notably, for instance, the company recently announced that it was setting aside $16.7 billion for employee compensation. That's around $700,000 per employee. Really.

    At a time when the economy is contracting and job losses expanding, such numbers have observers miffed. At least one pension fund, The Security Police and Fire Professionals of American Retirement Fund, which had invested in Goldman, has hired a lawyer and filed suit to try to put a stop the payout.

    Fortunately, such suits raise the issues and send a message to leaders of public companies. But, unfortunately, there's little these shareholders or anyone can actually do to stop the Goldman-like bonanzas.

    As it turns out, pay for performance at many U.S. firms is frequently anything but. Often executives at companies receive lavish incomes for average production. Worse, some get fortunes, even though their performance has been subpar. And, worse still, sometimes executives receive sheer windfalls, even while their performance has been awful.

    In fact, the Goldman payout isn't the first time high executive compensation has raised shareholder ire.