Activist investors destroying companies, costing jobs: Top corporate lawyer
This article is about how Activist investors are destroying companies and causing unemployment. According to Martin Lipton (a US corporate lawyer), the shareholders are ‘becoming too powerful’ and in the long run may result into companies getting weaker. According to Lipton, companies with activist shareholders ‘disappear within 2.5 years’. He adds that management-centric governance focuses on long-term goals of the company compared to the shareholder-centric governance.
However, while the management may focus on the long-term success of the firm, there is no doubt the shareholder centric governance looks at the bigger picture in a company. In most cases, the management will focus on maximizing revenue. This is indeed a good thing since the main objective of every firm is to make profits. However, Lipton seems to overlook the fact that firms need to carry out their social responsibilities like environmental protection and sustainability, among others. If the firm is only able to make profits but cannot create a shared value, then it is of less benefit to society. Therefore, activist shareholders are beneficial to firms.

http://www.bnn.ca/News/2013/10/8/Activist-investors-destroying-companies-costing-jobs-Top-corporate-lawyer.aspx

Goldman slashes pay as revenue plunges
According to this article, Goldman Sachs has slashed employee compensation following a reduction in the revenue generated by the company. While the estimated returns by financial analysts was $2.43 per share and a higher revenue, the actual share price rose to $2.88 per share while the total revenue dropped by 20%. In response, the company set aside 35% of its revenue as employee compensation rather than the usual 43% of its revenue.
While this move reduces the costs and thus makes sense financially, it however punishes the employees for mistakes they are never responsible for. Therefore, it is unethical for the company to cut the employee payment following only a one-time drop in the revenue. Furthermore, the drop in revenue occurred across the whole industry as rival firms like Bank of America, JP Morgan Chase & Co. as well as City Group also reported similar losses. The pay cut may also result to reduced motivation for work which may harm the productiveness of the firm and possibly lead to further drops in output.

Sharp, an electronics company is shifting to the production of Strawberries.  According to this article, the huge losses incurred by the company in the last three years have propelled it to quit the Electronics Industry and join the Agricultural Industry. With the use of the technology, the company hopes to venture into this new industry and hopefully make high profits by the beginning of the next decade.

However, I see this as another huge risk compared to staying in the Electronics Industry. This is because the company will have to start from the scratch in its agricultural production, in the production of something that it has no experience at all. In addition, such a move will result in a high level of unemployment for its employees. However, with in the Electronics Industry, the firm has stayed there for some time and probably needed to maneuver around things like more research and a few other adjustments to test the possibility of keeping up with the level of competition. Even in the worst case scenario, a merger with another company would probably help the company survive the tough competition.

http://www.businessweek.com/articles/2013-09-27/forget-tvs-dot-sharp-sees-a-future-in-strawberry-farming

In this article, food and drink firms are called on to minimize their suppliers’ land grabbing. In light of the increasing demand for sugar by major food and Drinks companies like Coca Cola and PepsiCo among others, the source of this sugar has been pinpointed to cause problems in society. According to the report by Oxfam, (an international organization fighting poverty and injustice) sugar, soy and palm oil, are major causes of the large-scale land conflicts.
This is an ethical question on how much businesses should ensure that they undertake their transactions in a fair manner. However, is it their responsibility not to buy sugar until they have all the precise details of how their suppliers affect the society or any other parties? And how far are they expected to scrutinize the activities of their suppliers?
I agree they have a responsibility to ensure their activities have a positive impact on the environment and the society. However, extending their role to that of managing their partners is completely piling an extra role for them, which they do not deserve.

http://www.theguardian.com/global-development/2013/oct/02/sugar-food-drink-land-grabs