What is the point of this guide?Edit
This guide is meant as a "How to" on how to form a nonprofit organization with the ability to reform multinational corporations from the inside out and from the top down.
Who will want to read it?Edit
The guide is aimed mostly at activists in the nonprofit arena working on corporate reform issues. While it is meant to give a specific model for moving forward with corporate reform it is not meant to be an exhaustive resource. Moreover, it is really meant to be a 'concept' paper. In other words, unfinished, incomplete and in need or refinement would be appropriate descriptors of the project.
Do you encourage input from others?Edit
Yes, this is a wikibook that I hope is picked up by others. It is not meant to be a static project, but should always be in flux. Literally, if you have a better idea, please tell us what that might be. Put it here, in black and white for all to see.
Are there any ground rules for the discussion?Edit
Yes, do not use the name of specific corporations in the text. This is supposed to be an exercise in solution-making not gripe-making. Moreover, make sure that your examples, even without the names of specific corporations, can not be identified as a specific company. That is to invite lawsuits. It is best to stick to examples that are "common industry practice" in the such and such field. They should be sufficient for the needs of the text anyway.
What is the Basic Idea?Edit
You have to promise to stick with it beyond this paragraph otherwise you will dismiss the idea as nuts. Here is the idea in a nutshell:
Step 1 - Buy a (preferably, public) company.
Step 2 - Reform it from the ground up.
Step 3 - Sell it back into the market.
Step 4 - Refine the model as necessary.
Step 5 - Repeat steps 1 to 4.
Let me explain.
What is the More Advanced Idea?Edit
To look at the idea as a whole adequately, it is necessary to talk about the step in fuller detail.
Step 1. Buy a Company (preferably a publicly traded one)Edit
This step presumes a huge previous step--finding enough money with which to buy a company. Moreover, the idea of buying a company, just any old company, is too simplistic. We need to be sure the right companies are bought. Even more importantly, in order to identify the 'right' companies we need to create a filter based on broadly agreed upon values and principles that are defensible in public debate as universal or nearly so. So, step one actually looks more like this:
Step 1a = Raise enough cash in charitable donations to buy a publicly traded company that is an appropriate target for the mission on the charity buying it.Edit
This is, of course, what sounds so nutty about the entire idea. The corporations most in need of reform often seem to be the largest of all possible corporations in the world. If we look at the top 10 corporation listed in the world's stock exchanges we companies with market capitalizations of 521 Billion USD (on 10 Oct 2007). This is an enormous sum. If you think it is crazy to propose buying such a titan of industry on a nonprofit's budget, you are correct. It is crazy.
Luckily, that is not the proposal. We need to turn the model (and our thinking) on its head. At the moment, we think of multinational (global even) corporations and despair from our inability to effect change in the way they do their business. Their resources are simply too large, and ours are simply too small. In fact, this is not true. It is only our thinking that is too small. Let me explain.
While it is true that there are huge corporations with market capitalizations on the order of 500+ Billion USD. It is also true that there are a great deal of smaller companies as well. Many thousands of these smaller corporations exist and are traded in the public markets daily. Why is this so important?
Let us take another example. What if there is a publicly traded company in need of reform that is only worth 5 Billion USD? Well, certainly that is much better than the 500 we contemplated in our worst case scenario, however from a practical point of view it is, in fact, no better. I know of no non-profit organization (with the exception of the UN and a very few other NGO's) with budgets in this range. However, even if we could get the entire UN to dedicate its budget to such an undertaking, we would be lucky to buy a small publicly traded company in the US.
As it is...these many thousands of publicly traded companies in the US are still well out of reach for change.
Fortunately, there is still much more to think about in this regard. The following several factors all need to be taken into consideration in thinking about such a proposal. I will state them first and then discuss them in great detail.
50% gets you total management control. You have just saved yourself half of your task. Your 500B task just shrank to 250B!
Voting rights can be free. Voting rights can be borrowed and lent without cost. Persuasion is all that is really necessary to control a company. You may have just saved yourself several percentage points of work on the task if you can compel others to act on your behalf. Let's say in the worst case scenario described above you are 10% persuasive. You just saved yourself another 25B USD. Your fundraising task is now reduced to 225B USD! Well done.
Change can often be effected through ownership of a much smaller percentage.Edit
2. It is not necessary to buy one of the largest companies on the planet.Edit
There are literally thousands of publicly traded companies with market capitalizations under 100 million.Edit
Many privately traded companies for much less would also be appropriate targets.Edit
Step 1b = Create or describe a set of universal values that can be broadly publicly agreed upon to describe a filter by which to evaluate targets.Edit
The idea here is articulate a set of values that are as broadly agreeable as possible to those who are NOT investors in such companies. Some examples MIGHT be:
1. Equal pay for equal work across gender, age, ethnicity and other classes. 2. A livable wage for all. 3. Union or collective bargaining agreements for all labor pools. 4. Executive pay caps and principles aligning the needs of the community with the pay of executives. 5. Explicit commitment to fair labor practices and sustainable principles by corporate management. 6.
Step 1c = Buy that company outright, or some part of it in order to effect reform.Edit
Step 2. Reform the purchased company from the ground up.Edit
Of course, this involves several other activities. They include: