Corporate Responsibility for Libertarians

There's been a lot of comment about corporate pay and other anti-social corporate behaviour in the press over the last few years.

There has been precious little comment as to what to do about it. Here's an idea based on the following unashamedly libertarian principles.

1. Companies should be run in the interests of their shareholders.

If I buy an interest in a company with my money then it only seems fair that that company should work for me. It is no different to saying that if I buy a new phone then I should be able to use the phone as I please or that if I buy a house then I should be able to live in it.

I also think that companies should have due regard for the interests of their other stakeholders. Companies that ignore the interests of their customers, suppliers and employees aren't going to be very successful. But, and this leads on to point 2, that is what I happen to think.


2. It is not the business of government to tell shareholders what their interests are. 

Only shareholders know what their interests are. And this is the crucial bit. The interests of shareholders are not the same as the interests of the companies that they invest in. In fact, given that the beneficial owners of most of the big companies are normal people who are investing in pensions and ISA's and the like, the interests of the many companies' shareholders are aligned with the interests of society as a whole.

So why do companies seem to act primarily in their own interests and not in the interests of society as a whole?

My best guess is that, by law, they have to. In law companies have a duty to their shareholders which amounts to 'make as much money as you can while staying within the law and acting in accordance with some non-statutory codes of conduct'.

So the problems arise from government telling companies what their shareholders interests should be rather than getting companies to actually listen to their shareholders. Fortunately we are now in a position in which getting companies to listen is practical it works like this.

Change the law so that

a. Any company that wants to carry out investment business in the UK must allow each of its customers to register a proxy voter who can use the voting power associated with their portion of the investment fund to influence the companies in which their fund manager is invested.

b. Politicians and Political Parties (and anyone else for that matter) can put themselves forward as a proxy voter.

c. Customers can choose to have a 'super proxy' instead. A super-proxy is a proxy who can nominate another proxy.

Imagine a country in which ordinary investors could use their voting power to give, for example, the Labour party the power to appoint the Directors of large corporations. What would that do to excessive corporate pay, or other corporate anti-social behaviour.

It's time to get companies to act in their shareholders' interests and time to give shareholders their voice.

Defining Standards in the NHS

but haven't we had too much of government standards and targets and all that?

To be honest I'm not entirely sure. But this post is not about that kind of standard. This post is about standards for 'interoperability'.

So, what do I mean any why is this important.

We use standards for interoperability all the time. If you buy a DVD it will play on a DVD player because someone, somewhere has defined a standard for how DVD players read DVD discs. Provided both the disc and the player meet the standard then the disc will play in the DVD player. Or consider the keyboard on which this is being typed. It's a standard qwerty keyboard on my laptop. All keyboards work pretty much the same way so I can pick up any computer and type into it with the same degree of accuracy (or, in my case error) without having to learn a new keyboard layout.

Ok, so this is all very interesting but what has it got to do with the NHS?

Well, the answer goes something like this.

Suppose, for a minute that the government defined a standard for the electronic recording of entries on a patient's medical records. The standard could be very simple. Let's say that every entry on a patient's records had to contain a date and time of entry. The NHS number of the patient. The name of the patient. A code identifying what was done or was test was carried out (e.g XRays would have a code, prescriptions would have a code) and then some kind of document or image or text that describes the entry in more detail. For example, for an X-Ray we might just have an image of the X-Ray picture.

Now suppose that the health minister decreed that, from a certain date, all equipment purchased by the NHS had to comply with the standard. So, for X-Ray machines that would mean that if you went to get an X-ray done the machine would have to send a message to the central hospital computer saying "hey, we did an X-ray for this patient, here's their NHS number and name and here's an image of the X-Ray". The hospital computer would then say "right thanks for that I'll update the patient's medical records OR maybe I'll pass this information on to the place that stores the patient's medical records".

Suddenly, lots of stuff starts to become possible that wasn't possible before. Let's say you need to go to the hospital to get an X-ray done. The hospital updates your records saying that an X-ray is needed and what sort of X-ray it is. They might offer you an appointment but you might want to get the X-ray done somewhere else that is more convenient, may be a private clinic. So, you go to the private clinic, you give the clinic access to your medical records. They can see what kind of X-ray you need. They do your X-ray and then they send the "hey we've done an X-ray" message. Your medical records are updated. The doctor who wants to see the X-ray can be told that the X-ray that was requested is now done and the doctor can see the image of the X-ray. The doctor can take appropriate action based on what they see.