Watching the Watchers: Corporate Governance for the 21st Century

Watching the Watchers: Corporate Governance for the 21st Century
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A dissenting vote

The pioneers in the field continue to throw off sparks

Masterful update by top experts in corporate governance!

Watching the Watchers: Corporate Governance for the 21st Century
Robert A. G. Monks , and Nell Minow
Manufacturer: Blackwell Publishers
ProductGroup: Book
Binding: Hardcover

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Customer Reviews:

A dissenting vote.......2001-02-20

In "Watching the Watchers," Monks and Minow update - some might say recycle - the arguments advanced in their earlier book "Power and Accountability." As with that earlier book, "Watching the Watchers" makes a case for increased shareholder activism, especially by institutional investors. Unfortunately, the root claim - that shareholder activism is a good thing - is both positively and normatively flawed. There is some anecdotal evidence that institutions are becoming more active, using the proxy system to defend their interests and influencing policy through negotiations with management. Yet, there is little concrete evidence that shareholder activism matters. Even the most active institutions devote little effort to monitoring management. They rarely conduct proxy solicitations or put forward shareholder proposals. They do not to try to elect representatives to boards of directors.

U.S. public corporations are characterized by a separation of ownership and control: the firm's nominal owners, the shareholders, exercise virtually no control over either day to day operations or long-term policy. Instead, control is vested in the hands of professional managers, who typically own only a small portion of the firm's shares. This separation has costs, the most significant of which are referred to as agency costs, incurred to prevent shirking by managers. The agency cost model forces one to confront the question: who will monitor the monitors? In any team organization, one must have some ultimate monitor who has sufficient incentives to ensure firm productivity without himself having to be monitored. Institutional investors, in Monks' theory, function as such ultimate monitors. Because they own large blocks, and have an incentive to develop specialized expertise in making and monitoring investments, they could hold management accountable for actions that do not promote shareholder welfare, which should lead to a reduction in agency costs.

The benefits of institutional control, however, may come at too high a cost. There is good evidence that bank control of the securities markets has harmed that Japanese and German economies by impeding the development of new businesses. More importantly, there is a risk that institutional investors will abuse their control by self-dealing and other forms of over-reaching. If management becomes more beholden to the interests of large shareholders, it may become less concerned with the welfare of smaller investors. The U.S. experience with social investing by public pension funds, moreover, suggests that politicization of stockownership will be an economic drag. In general, the greater the extent to which a public pension fund is subject to direct political control, the worse its investment returns.

In my view, moreover, the separation of ownership and control is a highly efficient solution to the decisionmaking problems faced by large corporations. Separating ownership and control by vesting decisionmaking authority in a centralized entity distinct from the shareholders is what makes the large public corporation feasible. To be sure, this separation results in the agency cost problem described above. A narrow focus on agency costs, however, easily can distort one's understanding. Corporate managers operate within a pervasive web of accountability mechanisms that substitute for monitoring by residual claimants. Agency costs, in any event, are the inevitable consequence of vesting discretion in someone other than the residual claimant. We could substantially reduce, if not eliminate, agency costs by eliminating discretion; that we do not do so suggests that discretion has substantial virtues.

The root economic argument against shareholder activism thus becomes apparent. Large-scale institutional involvement in corporate decisionmaking seems likely to disrupt the very mechanism that makes the modern public corporation practicable; namely, the centralization of essentially nonreviewable decisionmaking authority in the board of directors. Given the significant virtues of discretion, one ought not lightly interfere with management or the board's decisionmaking authority in the name of accountability. Preservation of managerial discretion should always be the null hypothesis. The separation of ownership and control mandated by U.S. corporate law has precisely that effect. Monks and Minow make their living promoting institutional investor activism that undercuts the null hypothesis. But it is still bad public policy.

The pioneers in the field continue to throw off sparks.......1997-10-16

Monks and Minow practically invented the intellectual framework for the field of corporate governance in such early, visionary works as Power and Accountability. In this book, the authors draw upon a wealth of history and current events to update their prior work and advance the state of the art in what has now become a popular and highly respectable cause. As with their prior work, this book is an incubation chamber for fresh insights and original ideas. If you want to know where the rest of the world will be on these issues tomorrow, this is the book to read today.

Masterful update by top experts in corporate governance!
.......1996-09-15

Monks and Minow update and expand on their previous books Power and Accountability and Corporate Governance. As practitioners and theorists they provide dozens of examples from personal experience which enable the reader to quickly grasp the importance of corporate governance to wealth creation and social progress. In a few short hours of reading they cover the evolution of the corporation as a social construct, as well as the developing roles of shareholders, directors, and management. The book concludes with concrete recommendations which deserve thoughtful consideration.

Monks and Minow trace the evolution of corporate governance and note that "there was no conscious choice in favor of treating shares of stock as though they were betting slips for races that were over at the end of each day." "Every 'improvement' in the system for owning stock was designed to make it easier to trade. No one seemed to notice or care that each of these 'improvements' also made it harder to exercise classic ownership rights." "During the takeover era, it became clear that, though the system was designed to promote transferability above all, there was one kind of transfer that the system would not tolerate: the transfer of power from one group to another."

Monks and Minow are concerned with increasing corporate accountability. They argue that any attempt to do so through chartering restraints is doomed to failure because the company's managers can move virtually any place in the world. In addition, "the political process is too dependent on money to make it possible for the government to be the ultimate guardian of accountability." "The only answer is a system of governance that originates from within the corporation itself and that includes the participation of an informed and effectively manifested broad class of owners." They point out that the tax cost of pensions is in excess of $50 billion per year, the largest item in the budget after defense. Because pension funds are subsidized by public funds it is, therefore, "appropriate for government to define broadly how pension fund trustees should function in their capacity as owners of the country's industrial establishment."

They call for a "Federal Law of Ownership" to coordinate the action of relevant agencies. For example, "the government must set the standard for interpreting and enforcing the 'exclusive benefit' rule or ERISA to provide guidance for private sector fiduciaries." However, the prime responsibility falls not to government but to the pension funds and corporations.

In the end, "whether ERISA trustees will ultimately become effective monitors depends on two factors - DOL's willingness and capacity to enforce its regulation and, more importantly, the conclusion by corporate management that an ownership-based governance system is ultimately in their best interest." Government needs to draw a "bright line" on conflict of interest; management needs to acknowledge that "creative tension" between themselves and owners is preferable to the current system of unaccountable "phony governance." Pension funds would then create a market for new institutions offering "ownership services" and companies with effective governance performance would realize the benefit of lower capital costs.

reviewed by James McRitchie, editor of the Corporate Governance site at
http:/www.wp.com/CORPGOV

Watching the Watchers: Corporate Governance for the 21st Century
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Watching the Watchers: Corporate Governance for the 21st Century
Robert A. G. Monks
Manufacturer: NY
ProductGroup: Book
Binding: Hardcover
ASIN: B000MUBR28

Book Description

The employment rights of police officers are often ill understood and sporadically enforced. The Rights Of Law Enforcement Officers is designed to be a comprehensive review of those rights. The book is designed for the layperson, yet contains the supporting case law and statutory citations necessary to make it a reference tool for attorneys.

Customer Reviews:

A must-have for anyone involved in police supervision.......2007-05-30

As an Internal Affairs commander and, later, Chief of Police, the various editions of this book have been my first reference for the administrative processes. Now, as a consultant in the area of policy review and internal investigations, I recommend this book to my clients and students. Every police supervisor should have ready access to this book, and it should be on every IA investigator's desk.

Exactly what I was looking for!.......2007-03-15

I'm a recently appointed supervisor of the Internal Affairs Division and this book contains information that protects both my department as well as the guys and gals employed here. Anyone looking for information relating to regulations pertaining to the Police Officer's Bill of Rights should look into this book.

Every Officer should own this book.......2003-10-15

This is a must have for every law enforcement officer no matter what his position or title. I wish I could provide everyone in my Department with a copy.

Book Review.......2003-04-07

This was an excellent read. I must say as a public servent that all police officers should have an up to date copy of this book in his/her bag.

Constitutional Law and Liability for Park Law Enforcement Officers

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Gotta Have It

Constitutional Law and Liability for Park Law Enforcement Officers
Dan S. Murrell , and William O. Dwyer
Manufacturer: Carolina Academic Pr
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Binding: Paperback

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Customer Reviews:

Gotta Have It.......2001-10-17

This book is a must for any police officer especially park law enforcement. Hoping for a new version soon!

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The Role of the law enforcement officer in the protection of human rights (Monograph series)

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"Dead right": recognizing traits of armed individuals. : An article from: The FBI Law Enforcement Bulletin

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Some Common Sense, But Be Ready For Some Surprises

"Dead right": recognizing traits of armed individuals. : An article from: The FBI Law Enforcement Bulletin
Anthony J. Pinizzotto , Edward F. Davis , and Charles E., III Miller
Manufacturer: Thomson Gale
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Binding: Digital

Book Description

This digital document is an article from The FBI Law Enforcement Bulletin, published by Thomson Gale on March 1, 2006. The length of the article is 3533 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: "Dead right": recognizing traits of armed individuals.
Author: Anthony J. Pinizzotto
Publication: The FBI Law Enforcement Bulletin (Magazine/Journal)
Date: March 1, 2006
Publisher: Thomson Gale
Volume: 75 Issue: 3 Page: 1(8)

Distributed by Thomson Gale

Customer Reviews:

Some Common Sense, But Be Ready For Some Surprises.......2007-06-01

I was a criminal investigator for many years, but now a real estate investor who still operates in some pretty rough neighborhoods. I'm also a concealed carry firearm permit holder.

The author, along with other qualified law enforcement authors, engaged in a long series of criminal studies covering several years, much of which, included talking to the real people who did the crimes.

In this piece, Pinizzotto re-reminds the officer and citizen of the obvious....and individual wearing clothes inappropriate for the weather, looking suspicious and all that. But there was much more. As an example, using the hood of a sweatshirt to conceal a firearm, and the fact that none, repeat none, of the many perps interviewed used a holster.

This caused them to be constantly adjusting the position of the firearm, especially when sitting to standing, or exiting a car. There was also considerable discussion of situations involving women when confronted with more than one suspect.

Interesting and worth the e-doc purchase.

Effective leaders: do we have the right answers?(Notable Speech)(Professional Executive Leadership School): An article from: The FBI Law Enforcement Bulletin

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Effective leaders: do we have the right answers?(Notable Speech)(Professional Executive Leadership School): An article from: The FBI Law Enforcement Bulletin
H. Wayne, Jr. Duff
Manufacturer: Thomson Gale
ProductGroup: Book
Binding: Digital

Book Description

This digital document is an article from The FBI Law Enforcement Bulletin, published by Thomson Gale on March 1, 2007. The length of the article is 933 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: Effective leaders: do we have the right answers?(Notable Speech)(Professional Executive Leadership School)
Author: H. Wayne, Jr. Duff
Publication: The FBI Law Enforcement Bulletin (Magazine/Journal)
Date: March 1, 2007
Publisher: Thomson Gale
Volume: 76 Issue: 3 Page: 20(2)

Distributed by Thomson Gale

Making technology pay off: the right tools, attitude and time help officers maximize a technology's potential.: An article from: Law Enforcement Technology

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Making technology pay off: the right tools, attitude and time help officers maximize a technology's potential.: An article from: Law Enforcement Technology
Bob Galvin
Manufacturer: Thomson Gale
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Binding: Digital

Book Description

This digital document is an article from Law Enforcement Technology, published by Thomson Gale on April 1, 2007. The length of the article is 2302 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: Making technology pay off: the right tools, attitude and time help officers maximize a technology's potential.
Author: Bob Galvin
Publication: Law Enforcement Technology (Magazine/Journal)
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Volume: 34 Issue: 4 Page: 8(5)

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Pierre George alleges OPP harassment. (News).(Ontario Provincial Police ) : An article from: Wind Speaker

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Pierre George alleges OPP harassment. (News).(Ontario Provincial Police ) : An article from: Wind Speaker
Paul Barnsley
Manufacturer: Aboriginal Multi-Media Society of Alberta (AMMSA)
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Binding: Digital

Book Description

This digital document is an article from Wind Speaker, published by Aboriginal Multi-Media Society of Alberta (AMMSA) on July 1, 2002. The length of the article is 1319 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: Pierre George alleges OPP harassment. (News).(Ontario Provincial Police )
Author: Paul Barnsley
Publication: Wind Speaker (Newsletter)
Date: July 1, 2002
Publisher: Aboriginal Multi-Media Society of Alberta (AMMSA)
Volume: 20 Issue: 3 Page: 2(2)

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Supreme Court cases: 2005-2006 term.(Legal Digest): An article from: The FBI Law Enforcement Bulletin
Lisa A. Baker
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Binding: Digital

Book Description

This digital document is an article from The FBI Law Enforcement Bulletin, published by Thomson Gale on October 1, 2006. The length of the article is 4278 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: Supreme Court cases: 2005-2006 term.(Legal Digest)
Author: Lisa A. Baker
Publication: The FBI Law Enforcement Bulletin (Magazine/Journal)
Date: October 1, 2006
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Volume: 75 Issue: 10 Page: 24(9)

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Allegations of discriminatory law enforcement against SFPD officers: A need for further information

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Allegations of discriminatory law enforcement against SFPD officers: A need for further information
Mary C Dunlap
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Authoritative and reliable, this update to the World Economic and Social Survey 2003 offers a unique insight into current trends and policies in the world economy. Essential to both academics and business people, this report looks at the world economy in 2003 and identifies priorities for 2004. The report is designed to serve as a point of reference for discussions on economic and social issues taking place in various United Nations entities during the first half of 2004.

Alexander Hamilton's Economic Plan: Solving Problems in America's New Economy (Life in the New American Nation)
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Alexander Hamilton's Economic Plan: Solving Problems in America's New Economy (Life in the New American Nation)
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Binding: Paperback

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Book Description

Having toppled the bookselling giants on-line, Jeff Bezos is now leading Amazon.com
its list, not to mention a makeover for the web's most recognisable site, is Amazon
pushing its luck or positioning for the future of e-commerce? The so-called 'market
correction' has questioned the future of e-retailing, but for Amazon the future is still
bright.
Now completely updated for this new edition, Business the Amazon.com Way shows
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leaders everywhere.

Customer Reviews:

First Hand Experience from an Amazon Seller........2006-10-02

I can tell you first hand how Amazon makes easy money. I am a formal seller here at Amazon. Not a big seller,but an honest one with a 5 star rating and zero claims.However Amazon allows dishonest buyer's to do chargebacks months after a purchase and then has nothing in place to assist seller's in getting their merchandise back. Sounds like retail fraud to me!! I wish there was a lower rating to give to this website.They are truly at the bottom!!

Simplistic, Outdated Guide to E-Commerce Success. .......2006-07-27

"Business the Amazon.com Way" (first edition) was published in 1999, at the height of dot-com mania, when Amazon had 1,000 employees and was trading at $209 a share. So it's hopelessly dated. The book might still have merit if it included a good history of Amazon's early years, but the information on Amazon's foundation and early growth is sketchy. This book was aimed at aspiring internet entrepreneurs, touting the endless possibilities for business on the web and presenting Amazon.com founder Jeff Bezos as a shining example of e-commerce success. "Business the Amazon.com Way" is a simplistic handbook for web businesses more than a study of Amazon, and it looks even more naïve in retrospect, considering the dot-com crash.

Author Rebecca Saunders catalogs the reasons for Amazon's success that could be applied to your internet start-up: know your customers, update pages frequently, link from related sites, have clear long-term goals, brand the site, be customer-centric, staffing and recruiting, a distribution plan for fast order fulfillment and delivery, frugality, state-of-the-art technology, constant innovation, continual growth. And we get a general idea of how Jeff Bezos and the early Amazonians went about accomplishing these things. But it's pretty simple stuff. I don't think "Business the Amazon.com Way" did anything more than state the obvious, in limited detail, in 1999. If you're looking for a primer on Amazon's early years, Robert Spector's "Amazon.com: Get Big Fast" (2000) is equally enthusiastic and uncritical, but it is much more useful.

Very basic work.......2000-12-07

Very basic book on doing business via the web. This should have been released a generation ago when Amazon.com itself was finding its way. The new enterpreneur exploring online business is more knowledgeble than the informaiton and insight provided here and hence can disappoint reading it. It may be suitable for those who are hearing the name of e-business and trying to set up the business online for the first time in their country to know what happend when Jeff Bezos tried doing so for the first time in the history. Certainly this book is not for those who already heard about e-business.

200+ pages of nothing........2000-11-27

Ms. Saunders has taken riding someone else's wave to a new low - two waves really. The first is the branding and selling power of anything with "Amazon.com" on it. The second is the hope that this book will follow in the footsteps of Robert Spector's, "The Nordstrom Way," in giving the reader some insight into the world's leading and most successful e-commerce enterprise. Unfortunately, she fails to even remotely live up to either.

The book is dry and completely uninformative. Even worse, it's factually incorrect. A couple examples (though there are many, many others):

According to Saunders, Amazon.com set up shop in Seattle, Washington because Ingram is there. Um, Ingram is in Oregon, not Washington. What the heck is the Federal Trust Commission? I think it's usually referred to as the Federal Trade Commission.

These two errors and the many others in this book have regrettably been printed before - usually in the popular press - which speaks volumes about where she got her material.

The book is marketed as an investigative look at the business model and "Ten Secrets" that make it work. Considering the legendary secrecy surrounding Amazon.com's business and the supposed investigative nature of this book, I find it pretty amazing that she knocked it out without attempting to consult a single (current or former) insider. But then again, after the first two pages it becomes very clear that she had no intention of going out of her way. The book itself is about as pure an attempt to capitalize on Amazon.com's success as could have been imagined. Oh, and the ten secrets touted on the cover are actually basic common sense and obvious to anyone who visits Amazon.com on any sort of a regular basis.

If you're curious about Amazon.com, I say stick to Spector and read, "Amazon.com - Get Big Fast," (ISBN: 0066620414).

Keep in mind that as of this writing, there really is no truly in-depth factual piece on Amazon.com and it's business model. You can get more information about Amazon.com from the New York Times archives (online) or almost any Wall Street analyst who covers the company.

How much money came out of the pockets of Amazon Executives?.......2000-09-20

It seems like more and more these days books are being written by horrible authors that companies could pick up off the streets and have them write a book entirely about their company, but hide it as being a guide to successful e-commerce. If your looking at e-commerce, you don't just focus on one "semi-successful business", you focus on the many different e-commerce companies out there and you compare and contrast at their success. This book skims the surface on Amazon...but you are looking for more.

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