Wall Street Journal Notebook
Knight, E. S. (2014, March 26). The SEC’s Corporate Proxy Rules Need a Rewrite
Communicating with stakeholders and shareholders is a vital responsibility for modern business leaders. Many of them acknowledge the significance of doing so. Furthermore, the proxy-proposal system, set up by US Security and Exchange Commission, is a vital feature of publicly traded companies since it ensures that investors have a stake in how their company is run. Currently, investors who own $2000 of a company’s shares can bring an issue to a poll by all shareholders. While this is essential, Knight argues that it is burdensome and costly and thus should be changed. For instance, about $50,000 is used to carry out a vote even though 93% of shareholder proposals failed to garner majority support. Regulations from SEC dictate that most proposals must be considered, even if they make little sense. Knight believes that this needs to be changed. For instance, shareholders with proposals need to demonstrate that they have wider support before submitting them. This is the standard practice in other developed countries and ensures that only serious issues are subjected to a vote.
Business leaders have to be accountable to their shareholders. This also means that they have to listen to their opinions and look at ways of incorporating some of them into the business strategies. While this article recognizes this duty, it warns against haphazard proposals. It is my dream to one day become a chief executive of a Fortune 500 firm. In that capacity, I would encourage the owners to have an active input into the running of the business. However, I would also like to only deal with critical matters that have an impact on the organization. This implies that I would encourage the shareholders to stop believing in economic hearsay and sensationalism and waste the company’s resources on unnecessary votes.
Murray, A. (2014, March 26). Seven Reasons for Optimism about the News Business
The past ten years have been tough for journalists. For instance, newspaper newsrooms have cut jobs by almost a third while newspaper advertising revenues have fallen by half. However, this does not mean that the news business is crumbling. The author has listed seven reasons why the news industry is only revolutionizing, not collapsing. First, many people are entering the digital world. For instance, BuzzFeed and Mashable have been busy recruiting new members of staff. Second, there has been a trend towards smart money. Third, people are now consuming news through mobile devices. Fourth, youth are turning to social media to get news. The fifth, incredible growth in online video news has been witnessed. Sixth, digital tools have brought about new ways of engaging news consumers. Finally, Paywalls have created a new source of revenue.
With the remarkable growth in information and communication technologies, newspapers, television stations, radio stations, and other traditional media have had to grapple with a dwindling customer base, as many people turn to new digital devices. While this article acknowledges this shift, it gives these traditional media outlets, as well as aspiring journalists, hope for the future. The faster they go digital, the quicker they will get back on track financially. Journalists have been given the challenge of seeking employment from nontraditional news outlets. For instance, instead of dreaming to join the New York Times, they can still establish successful careers in Mashable. From this article, I have noted the importance of embracing technology in my daily and future professional life. In this age, people who have mastered digital technology and, apply it efficiently, will thrive.
Camp, D (2014, February 25). Dave Camp: How to Fix Our Appalling Tax Code.
The United States has effected numerous changes to the national tax code in the past ten years such that it has become extremely big and complex. This has meant that Americans spend more than six billion hours every year just to file their returns. In total, $168 billion is lost in the process. Presently, the US tax corporate rate is 39.1%. When compared to other rates in the developed world, this is the highest. All these developments have arisen since the country last enacted comprehensive tax reform in 1986, 28 years ago. According to the author, this code has become outdated and needs to be changed. He makes three suggestions of how this can be done. First, the code should be made simpler so that every business can file its own taxes without fearing an external audit. Second, it should be made more efficient by eliminating special-interest handouts, which would translate to lower taxes for businesses and families. Last, make it more accountable and fairer such that there will be no hidden provisions to benefit a few businesses.
This article has raised an important issue that often goes unnoticed. In the past, famous people have been accused and jailed for tax evasion, even though it was no fault of their own. Meanwhile, small businesses have been incurring significant expenses in hiring accountants just to file their tax returns. This has meant that billions of dollars are spent unnecessarily. Therefore, it is time that the tax code is simplified, for businesses and families. This will be one way of boosting the business sector. Reducing the corporate tax will also play a crucial in encouraging entrepreneurship and investment.
Olson, W. (2014, 23 March). The Justice Department’s Unjust Toyota Fine
Recently, Toyota paid $1.2 billion and accepted Justice Department charges that it had withheld information about the security of its car. In this article, Olson wonders whether this was a triumph for vehicle safety or simply a coercion to compel an image-conscious company into giving out a large payout. At the height of the investigation, the company supposedly assured the public and regulators that it was addressing issues with its car safety. However, it failed to report data and an aborted small reformulation of a pedal design to the National Highway Traffic Safety Administration. According to the author, this was a trivial misdemeanor. In general, Toyota cars are extremely safe. For instance, its cars did not feature in the 12 deadliest 2001-2004 model cars on US roads. Toyota and Lexus also had five of the twelve safest cars, according to the number of driver deaths in an accident.
This article has raised an important matter related to business ethics. Every business is expected to uphold values that would set it apart from the rest. For any organization, business ethics entail giving customers the right information about products, establishing fair prices for products, adopting proper accounting standards, treating employees appropriately, and engaging in legal competitive practices. Therefore, even though Olson laments that Toyota’s fine was unjust, he fails to understand that by hiding some data, it was probably concealing something that it wanted to remain secret. Such a move was unethical. Toyota’s example demonstrates why business leaders need to uphold high standards. Personally, I feel that acting ethically starts with an individual person. If I aspire to behave morally at all times, I would translate that to my future business endeavors.
Carney, B. M. (2014, March 25). What’s More American Than Parmesan Cheese?
Early this month, the European Union came up with rules to govern protected geographic indications (PGI) and protected designations origin (PDO). The law allowed food producers to legally protect the names of their products. For instance, Parmesan cheese, prosciutto, and feta could be copyrighted, meaning that other food manufacturers outside those regions would not use them. The EU justified this law by stating that consumers usually have difficulties differentiating authentic foods from fake ones. For instance, a person may not be able to distinguish real Parma ham from a knockoff. This law received opposition from many quarters, including the Senate since it has long-term implications for US manufacturers. A case in point is Parmesan cheese. This is an American product yet it bears its name from Parma, an Italian city. If the law is applied as it is, cheese manufacturers from Parma would copyright Parmesan cheese, thereby forcing the American firm to change its widely known name. In refusing this law, Carney argues that the EU should have followed the traditional trademark law.
This article has illuminated a topic that has become prevalent in the age of globalization and digital technology. With information readily available, businesses can easily fall into the trap of copyright infringement. In the past, companies such as Samsung have been compelled to pay billions of dollars after they were adjudged to have illegally copied ideas from other companies. With the level of competition at an all-time high, companies’ innovations have to be protected. However, as this article has noted, copyright law should not impede genuine competition. Generic ideas should not be copyrighted. For instance, the popular Italian cuisine should not be copyrighted as a preserve for Italian firms because doing so would hurt the global food industry.
Camp, D (2014, February 25). Dave Camp: How to Fix Our Appalling Tax Code. Retrieved 27 March 2014 from http://online.wsj.com/news/articles/SB10001424052702303426304579403252458098042?mg=reno64-wsj
Carney, B. M. (2014, March 25). What’s More American Than Parmesan Cheese? Retrieved 27 March 2014 from http://online.wsj.com/news/articles/SB10001424052702303802104579455560641038786?mg=reno64-wsj
Knight, E. S. (2014, March 26). The SEC’s Corporate Proxy Rules Need a Rewrite. Retrieved 27 March 2014 from http://online.wsj.com/news/articles/SB10001424052702303802104579451950334785182?mg=reno64-wsj
Murray, A. (2014, March 26). Seven Reasons for Optimism about the News Business. Retrieved 27 March 2014 from http://online.wsj.com/news/articles/SB10001424052702304179704579459491772343178?mg=reno64-wsj
Olson, W. (2014, 23 March). The Justice Department’s Unjust Toyota Fine. Retrieved 27 March 2014 from http://online.wsj.com/news/articles/SB10001424052702303802104579451960850045676?mg=reno64-wsj