nab stewart interview abc inside business, page-2

Of course it is! But it is also the reason why Greenspan was wrong. He has admitted now that he was wrong in thinking that companies can "self-regulate" in the best interests of shareholders.

The problem is the individuals making the decisions in corporations (i.e. the CEO and other "C" executives, which is the same group as the board members). These individuals MAY be shareholders also, but they also are employees. Even if they are S/H, they often have a short term horizon, due to their involvement being in the form of options etc. (e.g. Trujillo at Telstra as a classic example, but there are very many more).

So these executives make decision in their OWN best interest - which is to maximise their salary and the return from their (short term) holdings and options. What happens to the companies in the long term is of absolutely no interest to them.

I mean - think about it - they come into a company for 2 or 3 years, make 10 or 20 million, and piss off to their next "engagement". Who do you think they're looking out for?