Shareholders Have Power: It's Up to Them to Use It

The irony of the corporate power debate is that we, the people, own these corporations, and their CEOs are our employees (''Too much corporate power?'' Cover Story, Sept. 11). Through pension funds, mutual funds, and individuals' shareholdings, most stock is owned by middle-class Americans, not by the superrich.

This irony can become the solution. As more of us vote our stock via the Internet, competing ''infomediaries'' will enable us to influence corporate policy. An organized shareowners' voice can moderate CEO pay and balance profit-maximization with social goals. Making corporations accountable to owners will lessen the destructive ''us vs. them'' attitudes that pervade this controversy.

Potential candidates for the infomediary role include pension funds that have begun posting their voting decisions on the Web (California Public Employees Retirement System, Domini Social Investments, Pax World Fund) and proxy advisory firms (Institutional Shareholder Services, Proxy Monitor Inc., Investor Responsibility Research Center).

Mark Latham
Founder
Corporate Monitoring Project
San Francisco

The fact that 72% of the polled citizens of the United States believe corporations have too much power over our lives is astonishing, especially when record numbers of Americans are invested in the stock market. If these people truly believe this, then they would not invest in the corporations that rule their lives, thus taking their power away. Obviously, this is not the case. I am thinking there are a lot of hypocrites out there if they agreed with Al Gore's criticisms of big corporations but have money in mutual funds and stocks.

Wake up. If you want what you put your money into to have more than one purpose (owe something to workers and communities and sacrifice some profit for the sake of making things better), then put your money in some kind of charity, not Corporate America. If you want to make money, invest in corporations.

Jeannie Rittmaster
Poway, Calif.

In this election year, corporate influence-peddling has become a lightning rod issue. With nearly three-fourths of Americans saying that big companies have too much political influence, the yellow light is flashing brightly for giant corporations.

At least one corporation has reacted. After several years of direct grassroots pressure, HCA: The Healthcare Company (formerly Columbia/HCA) broke dramatically with its own past practices and the prevailing standards among large corporations. HCA has instituted limits on its role in public policymaking that extend well beyond adherence to loophole-ridden campaign finance laws. New HCA policies restricting the corporation's political activity are backed up by actions such as a halt to soft-money contributions in the 2000 election cycle and a dramatic reduction in its lobbying force.

Your article and HCA's changes demonstrate that through our consumer choices and capacity to affect corporate images and brands, ordinary people are demanding and achieving real change from big business.

Kathryn Mulvey
Executive Director
INFACT
Boston

We cannot rely on corporations to exercise any meaningful self-regulation. This must come from government. The fact that citizen groups have had some success in fighting the more insidious excesses of industry is to their credit but, more importantly, a testimony to the failure of the legislatures to perform their job in representing the interests of the voters and the country at large. As long as massive contributions from industry (and unions) dominate the political process, we will have a government that is not truly responsive to the will of the people.

Ralph Nader reminds us that with wealth comes responsibility. He reminds us that by turning over our political system to corporations, we have given up our power as voters. He reminds us that we have unsolved environmental and social problems and that we are piling on more as we continue to allow industry to forge ahead without meaningful public accounting and control.

Paul W. Rosenberger
Manhattan Beach, Calif.

A Better Route to Higher Labor Standards

The Cambodia labor agreement about which you write in ''A bumpy road to labor reform'' (International Business, Sept. 11) is a test case for global standards, but it's not the only one. Through the Fair Labor Association, a group of companies with a combined volume approximately 50 times the size of the Cambodia apparel and footwear industries is trying another route to higher labor standards. These companies have committed themselves to deal only with factories that observe clear standards protective of workers and of freedom of association. And they have committed to independent monitoring, thus avoiding the problem of corrupt local officials and lax or nonexistent enforcement of national laws.

It remains to be seen whether this cooperative model--relying on independent monitors, human rights groups, and consumers rather than government enforcement--can work. But if so, it is easily applicable in all countries without the need for difficult bilateral negotiations. It does not require enforcement by local officials. And it helps to lift the standards in all countries where these companies do business rather than only one. Establishing fair as well as free trade depends on making these test cases into the universal standard.

Sam Brown
Executive Director
Fair Labor Association
Washington

The authors assert that a deal ''meant to ensure labor peace'' opened the way to acrimonious labor-management relations because the union had ''gone haywire'' and organized strikes over raising the minimum wage, forced overtime, and intimidation of union organizers.

The authors seem to believe that the higher wages and better working conditions can be achieved through some avenue other than union-organizing and mobilization. This belief is not shared by global labor-rights advocates. Nor was it subscribed to by the authors of the Wagner Act, who were under no illusion that creating a legal framework to facilitate union organization would lead to labor-management harmony but, rather, thought that leveling the playing field between workers and employers made for good public policy.

Is it really so surprising that, given the slightest room for maneuver, Cambodian workers demand a higher wage, less forced overtime, and respect for their rights? Is it any less surprising that footloose foreign contractors threaten to leave Cambodia rather than pay a minimum wage of 23 cents per hour and lose the ''right'' to fire union leaders?

The solution is not to deny labor rights to apparel workers in Cambodia but to extend them to other workers in the region and the world who do not yet enjoy them.

Paul Garver
Research Officer
International Union
of Food Workers
Petit-Lancy, Switzerland

The Skyrocketing Cost of Bio Invaders

''Bio Invasion'' (Special Report, Sept. 11) rightly identifies international commerce as the principal means by which foreign species reach America. But the damage already caused by these bio invaders is even greater than stated. If one adds the costs of exotic weeds and plant pests, such as citrus canker, to the $9 billion cited for combating livestock disease, the total rockets to nearly $90 billion per year. That's 80% higher than the $50 billion reported for agricultural export earnings--yet U.S. trade policy focuses exclusively on increasing exports, even when that means undermining USDA's ability to protect us from introductions of new, damaging organisms.

Faith Thompson Campbell
Invasive Species Program
American Lands
Washington

No Johnny-Come-Lately to Electronic Trading

Regarding ''He'll silence the pits'' (Finance, Sept. 11): the Chicago Board of Trade is not a ''Johnny-come-lately'' to electronic trading. We first began electronic trading in 1992 with Project A, a system designed to trade nonconventional products during our open-outcry trading hours. In 1994, we rejuvenated Project A by listing open-outcry products for electronic trading when our open-outcry markets were closed. Two years ago, we opened Project A during the day to compete with open outcry.

When Project A was shut down on Aug. 25 to launch the A/C/E electronic trading system we developed with Eurex, it had traded nearly 6.9 million contracts for the year. In 1999, it would have ranked as the fifth-largest U.S. futures exchange.

David P. Prosperi
Senior Vice-President
Chicago Board of Trade
Chicago

''The investor's champion'' (Cover Story, Sept. 25, 2000)

In ''The investor's champion'' (Cover Story, Sept. 25), the caption on the photo of Merck & Co. Chief Financial Officer Judy C. Lewent should have said that Securities & Exchange Commission Chairman Arthur Levitt Jr. asked Lewent and a half-dozen other CFOs to testify on the separation rule. Also, the story should have said that accountants hold half, not most, of the seats on the Independence Standards Board.

''Stand up and fight'' (International Business, Sept. 11, 2000)

''Stand up and fight'' (International Business, Sept. 11) should have said that Chikara Minami, a plaintiff in a consumer-liability lawsuit against Mitsubishi Motors Corp., was the main witness in the trial. His three friends did not testify, nor did the prosecution present expert testimony as stated in the story. Also, the story said liabilities have never exceeded $50,000 in the cases that have come to a ruling since 1995. It should have said rarely, since there was one valued at $613,000.

''Bio invasion'' (Special Report, Sept. 11, 2000)

A table in ''Bio invasion,'' (Special Report, Sept. 11) erroneously stated that horses can get foot-and-mouth disease. They can't.

''A new rule book for fund managers'' (Finance, Sept. 4, 2000)

In "A new rule book for fund managers,'' (Finance, Sept. 4), the Chicago Board Options Exchange was incorrectly identified as the Chicago Board of Equities.