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Part - IV

At employee-owned W. L. Gore Associates, for example, their 'lattice' decision-making structure provides wide latitude for employees to make decisions and take entrepreneurial initiatives. Such freedom is tempered, however, by the company's concept of the 'watermark,' which suggests that decisions, which put the whole organization at risk - decisions below the watermark - require a greater level of scrutiny. Trust, ethics, and interdependence exist naturally at companies like this. Building a participatory ownership environment takes time, effort, and money, but it serves as an excellent foundation for the ethical relationships that all business relies upon.

Enron's collapse - and the terrible losses suffered by Enron workers - has created the political space for a real conversation about how employers have chosen to finance their employees' retirement. That debate is centered on the fact that millions of people hold stock option plans that are over-invested in the employer, which puts them at risk of suddenly losing their retirement savings.

Research shows that jointly managed trusts tend to boost benefits when funding grows, compared to corporate plans that tend to boost profits by reducing employer contributions. Moreover, it seems workers voluntarily contribute more to their defined contribution plan when there are worker trustees.

Employee representatives can serve a number of functions helpful to management. They can help in constructing benefits in response to worker needs, communicate the plan to co-workers, and help in damage control in times of crisis. Employee trustees on pension boards also help solve inherent conflicts of interest, when executives serve as pension trustees and must act solely for the benefit of participants, but are also pledged to maximize returns for shareholders.

And they should be from each broad occupational category: exempt, clerical, and non-exempt. Finally, the number of representatives should be in proportion to their representation in the workforce.

Power, as Daniel later, power tends to corrupt, and absolute power corrupts absolutely. Nowhere is the Webster said in 1820, naturally follows property. Unfortunately, as Lord Acton observed a few generations corrupting influence of concentrated power more apparent than in today's ultra-concentrated ownership and control of the modern corporation in the hands of a non-accountable financial and management elite. The systemic breakdown in ethics can be traced directly to this.

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* Contributed by -
Swastik Rath,
Class of 2004,
Goa Institute of Management,
Ribandar, Goa.