(The Return of) Ignatz, by Sam Heldman

Thursday, August 15, 2002

More on UAL Further thoughts about the NYT story on United's possible bankruptcy. Predictably, some management-side critics are quoted and/or paraphrased in that piece as saying that there's something wrong with unions and employees having a significant voice in corporate decisionmaking (as shareholders or directors) because it's a conflict of interest -- the unions and employees will vote in favor of their own interests as employees and shareholders (it is said) rather than thinking ONLY of their interests as shareholders. (With a particularly snotty tone, the CEO of Continental calls it "the inmates running the asylum," which takes some gall in the current climate of corporate shenanigans). In a nice coincidence, the U.S. Court of Appeals for the First Circuit decided yesterday that -- even in smally closely-held corporations, where shareholders tend to owe greater obligations to each other than they do in larger publicly traded corps -- it's ok for a shareholder to vote based on its own self-interest, at least so long as there is also a plausible business motivation for the vote.

posted by sam 12:27 PM 0 comments


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