Sir, – While I applaud the US Business Roundtable's recent rejection of shareholder value as the primary goal of business, Prioinsias O'Mahony is right to be sceptical ("Is shareholder capitalism dying?", Business, September 10th). Its members are no angels. Chief executives have an interest in limiting the power of troublesome shareholders.
We in the Planned Sharing Foundation have been calling for a more enlightened form of capitalism for many years, promoting financial democracy. The interests of social justice are better served by companies with a wider understanding of their role.
That role involves responsibilities to six parties, or stakeholders, of which the shareholder is only one. The others are the suppliers, customers, the employees, the local community and the state. No commercial association has come close to the effectiveness of the limited liability company in the production of wealth. But it has never been able to balance that with an equally effective wealth distribution model.
The Irish government introduced legislation favouring profit-sharing schemes in 1985, and has been steadfast in supporting exploratory steps in this direction. Now, with the gap between employers and employees, and between owners and staff widening more than ever, and facing seismic changes in our physical and social environment, we need to develop a more accountable form of capitalism.
Practical profit-sharing makes a good start. – Yours, etc,
BARRE FITZPATRICK,
Secretary,
Planned Sharing
Foundation,
Blackrock, Co Dublin.
Sir, – If shareholder capitalism is indeed dying, I’m sure that there are plenty of vulture funds out there to pick over the carcass. – Yours, etc,
MARY O’CONNELL,
Dublin 8.