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Saturday, 10 August 2013

my comments for @MartinSchulz for his post re "Did We Really Learn the Lessons of the Crisis?" | LinkedIn

Did We Really Learn the Lessons of the Crisis? | LinkedIn:

Dear Martin Schulz

your insights are impeccable.

even as president of the European Parliament, you may have noticed that you have only limited time in tenure and limited by power to be able to investigate let alone propose a fix that would be acceptable by all, and solution which would bring just and equitable solution to all stakeholders..

Lets be honest to ourselves, the power and money rest mainly with those few hundreds who span multiple jurisdictions and no one government or regulators can in fact pass law that rein them in (whatever industry that might be, let alone looking at the complex and intertwined economic systems worldwide).

I am not a defeatist but since the credit crisis, every key players just played a few musical chairs and now in 2013 regulators point a few fingers.  Sadly, everything stays pretty much normal.  Yes, many big corporations are talking CSR, investors talking about SRI, and much noise talking about new 'integrated reporting'.. sadly no one talks about and act upon finding the "truth that counts": truth about the health of the corporations, government's finances (hidden debts of Greece).  

Our accepted wisdom of a competitive economy still blindingly focusing on maximising "shareholder's value" at all costs (forgetting about everyone else, including behaviours like lets kill the chicken for the eggs) means no one is wiser... (yes as mentioned, we should look at maximising stakeholder's value instead!)

It is time now to accept that nothing much G8 /G20 or EU would be able to do realistically except thinking outside of the box, finding a 'non threatening' solution that might be acceptable by all stakeholders/political factions.

Only then, we could provide genuine economic incentives and transparency to encourage and promote the firms that adhere to what you are suggesting which is essentially "Do the right thing, from the corporations' & governments' perspective".

I would totally recommend the book by Prof. Colin Mayer on "Firm Commitment" that highlights we already have key ingredients in Europe/Western world, just need to re-adjust the firm's commitment and also punish them should they veer off course.. this is congruent to what my company GamBond® is spearheading.. a long way off but at least it is a concrete step towards a new and viable ecosystem that promote firms having long term goals and will stay around doing good & right things (if a guaranteed firm goes bust, we would assume all their liabilities!).

You are right in saying that Europe cannot unilaterally decide key decisions like austerity measures as it does not exists in vacuum and should EU made it too difficult, people & firms with means just move away to adjacent countries or leave altogether!  Policies should be done by using "game theory", in short, think like the firms/people that you are trying to control & the dynamics of others.

Planning for short term & without considering world dynamics and only from EU's perspective is dangerous, as becoming insignificant in a very short period of time may become an unavoidable reality.

Good luck to us, the still hopeful Europeans.

BR

@GarethWong

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