Reining in the Corporation

By Ralph Nader

“We don’t use tax gimmicks” said Apple CEO Tim Cook this past Tuesday during a speech at a tech conference. This statement came just one week after congressional investigators released a report that documented how Apple, using a vast array of offshore subsidiaries, avoided paying their share in taxes to Uncle Sam. One must wonder how Mr. Cook defines “tax gimmick.” Unfortunately, it appears as if Apple uses such gimmicks as brazenly as many other profit-soaked, unpatriotic U.S. corporations.

It’s a sad state when such outright corporate hypocrisy becomes standard fare. Perhaps CEOs, such as Tim Cook, have become too accustomed to corporations having enormously greater privileges and immunities than actual persons. Profit-obsessed corporations can dodge and escape jurisdictions by creating offshore holding companies or subsidiaries. There’s very little accountability — and that’s deliberate. Corporations now have obscene global control over politicians, capital, labor and technology.

Robert A.G. Monks is an expert on the excesses of corporatism. He is a former corporate lawyer, corporate CEO, founder of companies, bank chairman, and investor-advocate. His latest bookCitizens DisUnited: the Corporate Capture of the American Dream examines the corporate takeover of the United States and explains, in detail, how corporations seized more and more power while shedding responsibility to their country, their customers, their workers, and their shareholders.

In theory, owner-shareholders should have considerable power in determining corporate philosophies — but that’s not the case. Monks writes: “[M]ore Americans have an ownership in the corporate economy than ever before in human history, yet the very processes that have enabled that — massive scale, algorithmic and index trading, pension funds and trustee ownership — have so scattered ownership and diluted its significance that corporations might well be said to be less “owned,” and certainly less under the control of their owners, than they ever before have been.”

And what of Congress, law enforcement, and regulators? Monks writes: “Bills to require timely or even any disclosure of corporate political donations are voted down in Congress. SEC censorship assures that shareholders cannot nominate or remove a director, or even effectively communicate with one another or with directors. No one gets paid to — or is required to — maintain accurate and accessible lists of legal and/or beneficial ownership of public companies. Nobody goes to jail because of mistakes or absence in the shareholder registry.”

So let us to turn to the CEOs — surely the corporate leaders of America should have some sense of civic responsibility, being the highest paid “workers” in the country. As of 2011, corporate CEOs in America made 340 times more than the average worker — thanks largely to rubber-stamping boards of directors that pay enormous bonuses regardless of performance. But many CEOs behave like dictatorial monarchs — or as Monks dubs them “Manager Kings” — entitled to everything and accountable to absolutely no one.

Monks sums it up well with this description of what it means to be a CEO in America in 2013. “You can do pretty much whatever you want, you have basically unlimited access to corporate resources to promote your own agenda and your own comfort, and you speak and act with the full and majestic force of your corporation behind you whatever its titular owners might believe.”

At one of Exxon’s annual shareholder meetings, Robert Monks stood up to make his points, but began by saying that the company’s CEO in front of him should be addressed as “Emperor.”

Such is the bleak picture painted by a writer who knows the inner workings of the corporate world. How troubling it is when Monks suggests: “…one would do better to look for democracy in some of the darker corners of the former Soviet Union than in the internal workings of virtually any major American corporation.”

These words should be a rallying cry to the disenfranchised shareholders, a spark for the people to recognize their plight and challenge the corporations that have become our masters, rather than our servants.

The change will certainly not come from the “Manager Kings” themselves. In light of the recent Apple tax controversy; this quote of an Apple executive speaking to the New York Times is most telling: “We sell iPhones in over a hundred countries. We don’t have an obligation to solve America’s problems.”