The Working Catholic
by Bill Droel
There are new rules for electing players to the All Star teams. As in a presidential election, fans now vote in a primary and then in a conclusive election. The primary determines the top three players at each position for each league (each league’s top nine outfielders are grouped together). The fan’s conclusive vote determines the starters. Then MLB players have a ballot, plus the All Star managers and the commissioner have some discretion. Thus some players will be in Cleveland on July 9, 2019 by way of the fans, others by way of fellow-players and some by way of management.
New rules for electing corporate boards are needed. Currently, stockholders vote (including by proxy). Many of these stockholders are “the most uninvested, irresponsible parties involved” with the company, says David Ciepley in Hedgehog Review (Spring/19). “They have never contributed a dime to the corporations” because they acquire the stock on speculation in the secondary market, often in a bundled retirement fund. They hold a stock on average for four months. They are uninterested in “making improvements for long-term returns” but instead favor “quickly squeezing what they can out of the company.” A few people acquire a company’s stock in a different way, but they too are often fixated on the firm’s quarterly performance on the Nasdaq or another exchange. These people are the company’s executives who are paid in stock, not cash. At election time they nominate and vote for like-minded directors.
A crucial step “for reducing corporate misconduct and for reorienting the corporation to public purposes,” writes Ciepley, is “overthrowing the baleful notion, currently regnant in law schools, the business press and even the courts…that corporations are purely private associations and that their stockholders are [in any meaningful way] their members, owners or principals.” He admits that “there is no simple or obvious path to restoring the public purpose of the corporation.” Ciepley does though allude to co-determinism, a mechanism for including stakeholders in corporate governance.
This notion, which derives from Catholic doctrine, has long been advanced by theologians, public policy leaders and business executives, as Matt Mazewski, a student at Columbia University, details in Commonweal (3/22/19). There are examples from Great Britain and elsewhere, though he concentrates on Germany.
Catholic philosopher and mining engineer Franz von Baader (1765-1841) was among the first to develop sound arguments for worker participation in corporate governance, Mazewski finds. By 1891 Germany passed legislation for factory councils to advise management. The notion gained popularity after World War II. For example, Heinrich Dinkelbach (1891-1967), a Catholic and a steel manager, devised a plan for general input from trade unions for business direction. In 1951 Chancellor Konrad Adenauer (1876-1967), also Catholic, won legislative support for special co-determinism provisions.
The general concept appears in several Church documents. It is explicitly promoted by Pope Pius XI (1857-1939) in his 1931 encyclical Reconstructing the Social Order. His Latin phrase for co-determinism, collegia ordinum, is translated industry council plan in the U.S. Pius XI and the others said that some form of this doctrine tempers adversarial feelings between workers and owners because both are participating in the company’s success. It puts an emphasis on self-regulation and thus makes government meddling in business less necessary. The temptation to absorb these stakeholder councils into one or another government agency must be resisted. Unions do not disappear; management does not disappear; stockholders remain and government retains a role. The council plan can be variously constituted and look differently in various sectors. With genuine and full cooperation a business grows because participation is enhanced through the plan.
Establishing a true community of work “will not be easy,” Mazewski concludes. But putting varied interests on corporate boards “would certainly be a good place to start.”
Droel is associated with National Center for the Laity (PO Box 291102, Chicago, IL 60629). NCL distributes Were You Born On the Wrong Continent by Tom Geoghegan ($20), which considers co-determinism in Germany.