The nonsense of shareholder ownership

SC_ItinerantArtWho1Neoliberals claim that shareholders are the owners of companies. This is nonsense, argues Austin Mitchell MP and Prem Sikka, Professor of Accounting, University of Essex in this joint paper published in Left Foot Forward.

In its 2013 report, the UK Parliamentary Commission on Banking Standards concluded that “shareholders failed to control risk-taking in banks, and indeed were criticising some for excessive conservatism”. The Commission rightly recommended that company law should be changed to remove shareholder primacy in respect of banks, and require directors to ensure the financial safety and soundness of the company ahead of the interests of its shareholders.

No political party has had the good sense to follow up the above recommendations from the Commission.  Instead, economic elites continue to preach the futile myths about empowering shareholders to check corporate abuses.

But do shareholders enjoy any of the powers that neo-liberals ascribe to them?  As Prem and Austin point out, neoliberals equate “ownership” of shares with ownership of companies. Yet they provide neither theory nor evidence to support this claim. We can all enjoy a legal right to own a pen, a pencil, a car or a house, something which gives us rights, powers, liberties, duties and liabilities. We can use and destroy a pen. If a car that we own injures someone then we can be held liable. If we hold late-night parties at our houses which disturb others, police can be called to remind us of our obligations to neighbours. But ownership of shares in large companies is not like that.  Read why here.

 


Related Posts

The Offshore Wrapper: the Panama Papers, one year on

Photos from the Protest outside PwC 1 Embankment Place, part of the Global week of action for tax justiceWelcome to the Offshore Wrapper – your weekly update from TJN.  Happy Paniversary! This week it’s been one year since the Panama Papers were leaked, and a number of organisations around the world have been marking the occasion though the global week of action for tax justice. In London, activists from the TJN and the […]

READ MORE →

Protesting PwC: Professionals Without Conscience

Photos from the Protest outside PwC 1 Embankment Place, part of the Global week of action for tax justiceThis week is the global week of action for tax justice and on Wednesday 5th April activists from the Tax Justice Network and Methodists for Tax Justice held a protest outside the London offices of Price Waterhouse Coopers. The global week of action for tax justice is happening one year after the release of the […]

READ MORE →

Germany moves forward on corporate transparency

ReichstagThe Bundesrat has today voted to recommend implementing a public register of the beneficial ownership of companies and trusts.  Great news from Germany, as the country takes an important step forward towards corporate transparency.

READ MORE →

New estimates reveal the extent of tax avoidance by multinationals

Price Waterhouse CoopersNew figures published today by the Tax Justice Network provide a country-level breakdown of the estimated tax losses to profit shifting by multinational companies. Applying a methodology developed by researchers at the International Monetary Fund to an improved dataset, the results indicate global losses of around $500 billion a year. The figures appear in a […]

READ MORE →

Banking Secrecy in China, its related territories and Taiwan

Hong Kong from Sky 100Foreword. The Tax Justice Network is a non partisan network of experts working towards transparency, so we do not take any position about countries’ territorial and political claims. However, we do expect countries with a de jure (legal) or de facto (in practice) influence over other territories, to take responsibility for their power. We point […]

READ MORE →

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top