Lynn Stout

For those who think about such things as fiduciary duty and the efficient markets hypothesis, this is a fascinating and highly recommended read.

I met Lynn at Tellus Institute two years about when she was giving a talk about this subject. This book has been on my list since then.

Her thesis is in the subtitle. A more nuanced summary of her book gets into the fact that, ultimately, shareholders are people, and people have many needs, of which money is just a small part.

There are lots of great numbers in the book, such as those that point out some Jevon's Paradoxes of finance. Such as, when executive pay gets tied to share price to "increase the efficiency of the management" companies spend many times more on executives and become less efficient overall.

It's gotten me thinking about is the importance of integrating ownership with management. If people don't feel responsibility and support in their roles, what they are stewarding won't do very well. This is what we do in corporations when we tell management that they're not owners. And stock options aren't the answer. Something more like a coop is what we're looking at.

One last thing: shareholders don't own companies! I love this, as it gets into the metaphysics of economics. It makes me think of my simile of money as intelligence. If putting shareholders first is bad for people, why do we do it? Because it is good for money!

Anyways, I'd highly recommend this book, and look forward to the conversations it starts.… (more)