Who’s the true leader of a corporation?
What is the true leader of a corporation?
Probably the most significant way today that money rules the world is through corporations. It is now said that corporations rule the world. Here in the USA corporations have apparently been given the same rights as individual human beings. What have we given these rights to? Who or what is the true leader of a corporation?
A corporation is made up of workers, a CEO, a board of directors, and stockholders. The CEO is hired to run the corporation so that it makes money. If the CEO does not make money the board of directors fires the CEO and hires a new CEO who will do whatever it takes for the corporation to make money. The board that hires the new CEO, however, is driven by the stockholders. But the stockholders are invested through mutual funds and don’t know much about the corporations their money is supporting. All the stockholders care about is whether their funds go up or down. If the stocks are not making enough money, which can be hard to do in this competitive world of dwindling resources, the CEO is then forced to make decisions based on money instead of common sense. So the CEO tightens the budget and passes that constraint down to his managers below him. Then a manager under the pressure of the CEO makes a decision based on money instead of common sense. The expensive valve is not purchased and suddenly the Gulf of Mexico is loaded with over 200 million gallons of oil. Who, or what, caused this to happen?
Some would say the manager is at fault because he did not purchase the necessary valve. But he was pressured by the CEO who was in turn pressured by the board of directors who were pressured by the stockholders whose only care was to increase their stocks. Money is the common denominator for all the pressure and all the decisions. The bottom line is the stockholders, but all they care about is if the stock goes up or down. All decisions, therefore, are made based on money with the ultimate intent of increasing money. Money is therefore the true leader of a corporation.