Currently, Corporate Executives are free to serve on the Board of Directors for more than one Corporation.
This ultimately allows for a lot of incestuous relationships between corporations and prevents the Corporate Executives from focusing on the needs of the corporations shareholders - who are ultimately intended to be the true bosses of the corporation (next to the customers who can put the corporation out of business by not giving them money).
It’s not unlike how it’s difficult for an individual to properly serve as part of a government while having Dual Citizenship - one can not have more than one master. So when a Corporate Executive is on the board of more than one Corporation, how does the Executive properly serve the needs of more than one Corporation?
Thus, I think it would be reasonable to legally require that no individual may serve as part of the Board of Directors of more than a single Corporation at a time.
If anyone has any comments or counterarguments, I would be happy to hear them.
Not the governments role. There are a finite of capable business leaders to fill these roles. The new CEO of Starbucks is so good he blew all comp packages out of the water after cutting his teeth at Chipotle.
A federal incursion into the free-market is very seldomly warranted and this is not a wise proposal.
If shareholders (owners) really want to see their companies be as productive as the likes of Tesla, Space X, Apple, Nvidia, Microsoft, or Meta Labs then they should toss their boards out.
We certainly are experiencing a middle-manager capture of both state and private business; it’s up to the owners (we the public or shareholders) to install better leaders.
I’d be happy to respond to your positioning that “given the rules that already exist on how Corporations operate I don’t see how this is any more intrusive or worse”
What rules do corporations operate on that equates to an acceptable encroachment of government in the way they manage themselves?
First, Corporate boards are required to act in the best interests of the shareholders. Perhaps the single biggest example of a corporation that’s not fulfilling this duty right now and it being overlooked is Disney.
Second, Corporate boards are required to actually hold the CEO accountable. Again Disney is the key example of a company that technically doesn’t have a board because all the board members (many of whom are connected with other corporations) are all hand picked Iger stooges.
Disney is also a case study in why your argument for “the Shareholders should just toss out the bad leadership” doesn’t actually work the way you think - you should go look up the Disney corporate battle that happened earlier this year.
Third, Corporations operate under strict reporting standards, including disclosing expected company performance to the best of their ability. For example, they can’t just underreport in order to ensure actual results are better than expectations.
Fourth, rules that exist around corporate mergers and buyouts.
If I own a company and I want to install all of children with inflated salaries and destroy the company. That’s my right.
In the same way I can drive my car off a cliff (and not claim insurance money) if I desire to.
Yes, managers have a fiduciary responsibility to shareholders in the publically traded domain. But that usually means that major acquisitions/mergers/sales of businesses are left to shareholder vote. Board members establish a CEO, the CEO then determines how the company is run, meaning who is hired, fired, trained, moved, what prices are, what products are sold, etc.
If a company has an issue with the direction of the company the responsibility is of the board to replace the CEO. If shareholders have an issue with both board and CEO their responsibility is to call a proxy and replace the board.
As I’ve stated many times above, a blatant incursion of the state into private business for no reason. The mechanisms of change already exist. If you want Disney to change so badly; I’d encourage you to find a few hundred billion dollars and take a majority stake in the company.
Otherwise you’re just griping. And if you don’t like Disney’s direction, then sell the stock and let the free-market naturally punish it’s poor decisions thru loss of customers and loss of shareholders.