Tuesday, February 5, 2013

More than Profit Maximization?

I normally don't agree with Paul Farrell's articles, but this resonated on so many points similar to a post a short while ago on January 13th "On Shareholders" that I wanted to post a link. 

10 Signs Wall Street's Soul Sickness Grows Worse

The article by Farrell follows a similar theme that corporate culture has morphed into a singular focus on profits (in this case bank's focus on profits) has caused our corporations to often behave psychotically - without regard for their impacts on broader society.  Underneath it all it seems like Farrell is pointing to a theme that doing the right thing is not necessarily in the scope of what corporations try to do anymore (if that's what they ever did), but especially now decisions are increasingly made based upon short term profit motives without regard for the rightness or wrongness of an action.  Instead, rightness or wrongness becomes a PR problem - a messaging problem - a smokescreen of discussion that obfuscates that a decision was made for profit maximization purposes only.

If you read Farrell's article I think you'll agree there's little defense for the terrible actions of the banks other than they could make a lot of money doing it, and they thought they could get away with it.

As a shareholder in companies I want them to behave better - even if it means a degree of lower profitability.  By all means corporations have to have profitability as a top priority, but it's not the only priority.  It's OK to leave a little bit on the table and still make a better effort to do the right thing.

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