Intergalactic Summit

In the early days of the State buyers and sellers of of Megacorporation stocks were largely what is considered to be 'individual investors', such as wealthy families, who often had a vested, personals and emotional interest in the corporations whose shares they owned. 

Over time, however, the securites market within the State has become largely institutionalized:  that is buyers and sellers are largely institutions such as pension funds like Caldari Funds Unlimited, Trust funds, mutual funds, hedge funds, exchange-traded funds, banks, brokers, and other corporations.  

In short, at the founding of our State the owners of Megacorporations were wealthy families but in the modern State a huge portion of Mega shares belong to the 'lower-class' citizen of the State in the form of professionally managed pension funds.

These pools of invested money  are designed to maximize the benefits of diversified investment by investing in a very large number of different corporations with sufficient liquidity. The idea is this strategy will largely eliminate financial risk by not placing all of the investor's (in the case of CFU, millions of low level Caldari workers) eggs in one basket.  A consequence of this approach is that these investors have relatively little interest in the governance of one particular corporation when they own shares in dozens or even hundreds of corporations. It is often assumed that fund managers pressing for change in a corporation it owns shares in will likely be costly they will simply sell out their interest rather than fix the problem.

While the rise of the institutional investor has brought with it some increase of professional diligence and much needed reforms of the State's Securities Exchange regulations.  Unfortunately however, there has been a concurrent lapse in the oversight of our megacorporations, many of which are now owned by large investment funds. 

In the days of our forefathers The Board of Directors of  megacorporations were chosen by the principal shareholders, who at the time usually had an emotional as well as monetary investment in the company, and the Board diligently kept an eye on the company and its executives - hiring and firing CEOs and lesser executives based upon merit.

Nowadays, if the owning financial institutions (such as pension funds) don't like what CEO and his or her executive staff is doing or they feel that firing them will likely be costly or time consuming, they will simply sell out their interest to someone else.  Were as in the past a more involved principle (like s founding family) would be more likely to weather the risks and attempt to see the company change course for the better.  A prime example of this sort of behavior being the firesale of Caldari Constructions shares during the Piak riots were investors chose to bail out instead of standing by the CC employees and customers.  Such a thing would have been unthinkable to our gradparents.

A recent study by STI and The Karnola Financial Reader [1] found that companies in which "founding families retain a stake of more than 10% of the company's capital enjoyed a superior performance over their respective sectorial peers." Over the last decade, this superior performance amounts to 8% per year.  One of the biggest strategic advantages a corporation can have, is blood lines."

In the modern  Board is instead mostly chosen by the CEO, and may be made up primarily of their friends and associates, such as officers of the corporation or business colleagues. Since the institutional shareholders rarely object, the CEO generally takes the Chair of the Board position for his or herself thus makes it much more difficult for the stock owners to "fire" him or her.

This is how CEOs like Haatakan Oiritsuu come to power.   In her tenure as CEO Oiritsuu violated the trust of the Kaalakiota's employees( who ironically were KK's shareholders), spat on Kaalakiota's core values such respect for it's employees and ignored the centuries old management principles that had made Kaalakiota the largest and most successful corporation in the State.  Under her direction Kaalakiota went from being the most benevolent and respected of the State's corporations into a sad caricature out of bad science fiction novel.

The great men who founded our State chose to hand down leadership to their children and moving away from this time honored tradition has weakened the Caldari.    

They teach at the State War Academy that you shouldn't point out a problem without also suggesting a solution.   However, I am just a humble Starship Captain and a solution is beyond me.   

For pilots that share my concerns or wish to discuss possible solutions feel free to send me a message or drop by the FTL channel Heiian College.

A interesting, good read as always Grayson-haan.

Nederland-haan,

As usual you get to the heart of the matter in a few short words, were it takes me paragraphs.

I also find myself wondering what could be done to return the reigns to those our forefathers intended to lead us.

Unfortunatly neither Haatakan Oiritsuu's nor Tibus Heth's leadership is the proper evolution of Matias Sobaseki's vision.

An excellent insight.

There is every possibility of successfully achieving the founders' vision and being left unsure what to do next. The idea cuts across cultural divides.