Managing Leadership^®

We briefly reviewed, yesterday, one generally well-known aspect of the anonymity of owners in today’s publicly-held companies - the difficulty of determining who, really, they are, or who are their proxies through whom they own these companies. But that only points to the really key frustration in this equation, the question: What do they want?

Some want, simply, to get rich quick. Others also want to get rich, but over time. Many have specific objectives, such as the financing of a house or a college education. Still others are trying to calculate their retirement longevity and lifestyle goals, and the attendant financial requirements.

Often, these goals have little to do, actually, with the nature of the company invested in. The concern may not be what that company does, but what the likelihood is of its helping to meet a specific mixture of financial objectives. Somewhat similarly, many owners may be more concerned about the ideological, social, or environmental policies of a company than they are, strictly speaking, about its business model.

But today, it’s not just individual owners that, one way or another, have something they want from their companies. Because so great a percentage of this ownership is actually vested in collective investment instruments such as mutual funds or, generally much larger and broader retirement funds, these fund managers are discovering that they have a voice, as well. And it is often a strident one.

Those voices are driven by the investment purposes of their funds. These may be related to degree of risk, investment approach (such as value or growth), an investment sphere of one sort or another (geographic area, industry, country or range of economic development of host nation, technology), and increasingly, as alluded to before, ideological, social, or environmental orientation of the owned company.

To further complicate both the identity and force of whatever message may emerge from this mixture, individual owners then assemble these funds into a portfolio that corresponds with their overall (and, moreover, constantly evolving) investment aims, risk tolerance, regional/industrial sector preferences if any, and whatever ideological, social, or environmental sensitivities they wish to give expression to.

So, what can a board director do with all of that? He or she looks out at the sea of little old ladies, fellows barking orders into phones (or, now, of course, into ultra-portable computers and smart-phones connected via local area networks at airports and coffee shops to their online brokers), and everyone in between, together with fund managers and the regiments of owners they represent, and try to figure out what they all want.

But how do they distill this cacophony of voices into a single, actionable message? We’ll take a brief look at that, tomorrow. Please do stop by.

—

This post is a part of a series. You can learn about and link to the other articles here: Anonymous owners

—

Today’s tip: Speaking of powerful voices attempting to influence boardroom deliberations, there may be more weight given to so-called “influentials” both in this respect and in trend-setting in society at large, than is warranted. Please see this brief summary of the topic from Tyler Cowen, of Marginal Revolution.

—

If you look at the contents section on the sidebar of the main page of this site, you will see a listing of the article series that have been published here. You can click through to view summaries of the pieces, and then read the full series or selections that are of most interest to you. Enjoy!

And while you are, please also subscribe by email or RSS reader - thanks!

Similar Posts:

• The oracle
• The CEO: Pay and accountability
• Doing well from doing good
• The man behind the curtain
• The owner

Technorati Tags: owner, publicly-held, company, business, model, ownership, investment, instrument, mutual, fund, retirement, manager, risk, economic, development, board, director, Tyler Cowen