Clashes of interests

At University, you learn that a companies’ goal is to maximize the return on the shareholder's investment. Allegedly, the agenda of every single employee is carried out pegged to that core principle of management.

However, individual agendas do not always come up to scratch. The first bump on the road comes with the split between shareholders and managers. Whilst the former may feel like making a killing in the short run, the latter are inwardly motivated into doing what they can in order to keep their jobs for the duration of their working lives.

Of course, such a naive description doesn't always depict the reality. A huge percentage of shares are commonly found in hands of Pension Funds, whose managers, don't usually seek to cream off the benefits, but rather keep the business model in sound condition so as to harvest bumper profits in future. Likewise, not every manager is always concerned with the day after tomorrow, but alas, sometimes they are prone to making money hand over fist during their tenure, eating the shareholder's lunch.

Nowadays, groups of shareholders are campaigning against and grumbling about manager's practices that neglect to consider the sustainability of the company. Depending on how scattered the capital is, their behests are more or less likely to have an impact.

Having worked for several big companies, I've had the chance to witness these clashes of interests. Many times, I’ve wondered why nobody has created the internal figure of the efficiency auditor. A group of professionals attending every single meeting, doing their best to keep managers aligned to the company's values. Their results would not be mandatory, but at least they would be breathing down manager's necks, rushing them into leaving their comfort zones.

I'm talking about monthly meetings moving people around the country, forking out for hotel and flights expenses, or endless meetings to contradict what had been previously gainsaid.

In the end, everything relies on people’s nature. Shareholders yearn for their money back at a gain. Managers desire to keep their salaries and social prestige. Behave towards others as you would like to be treated yourself, and, with consumer permission, it will be a piece of cake.