Governance by the experts

Posted by Marc Hodak on August 8, 2009 under Politics | Be the First to Comment

In looking over the rush of bills being proposed by this congress to regulate corporate governance, I fished out this one by Congressman Keith Ellison (D-MN), called The Corporate Governance Reform Act of 2009.

A skeptic might ask what a civil rights and labor lawyer might know about corporate governance.  Has he ever advised a corporate board, or even attended a board meeting at a for-profit company?  In Ellison’s defense, one could say that governance is not just a concept applicable to corporations.  Every organization has governance mechanisms dictating what people need to do to obtain, retain, and exercise power.  That includes the organization whose average member controls about $6.5 billion in spending–the U.S. Congress.  What governance lessons would Mr. Ellison have learned from his experience with that institution?

1)  Figure out what your constituents’ needs and preferences are, then use that info to campaign to win enough of their votes to get elected.

2)  Once in Congress, serve as a voice for your electorate, adding your ideas and judgment to the debate of the great issues of the day….

Ha ha.  Just kidding.  Here is what he really learned:

1)  It helps to get your party’s nomination in the most gerrymandered district in your state, one in which the opposing party has not won since 1963.

2)  Once you get your seat, do pretty much whatever your party leadership tells you in order to maintain their endorsement for your seat, and get onto a juicy committee.

3)  Use your plum committee membership to hustle donations from organizations well outside of your district that will be  impacted by your legislation.

4)  Raise more than the $1.4 million average for House members in order to gain the respect of the party bosses.  Never mind that your House seat is not contestable, and you end up outspending your opponent 25 to 1.  Your fundraising ability is your cred in this ‘hood.

This model has been gamed to perfection by both parties to the point that the turnover rate of democratically elected congressmen in supposedly contested elections is lower than that of corporate directors in avowedly uncontested elections.

Given the Congressional governance model that Ellison is most familiar with, one can forgive him for supposing that if the corporate governance model is only one-tenth as bad, it must surely need some help from any quarter.