Double standard (Part 2)

(1) In the issue of March 14th 2019 STERN magazine criticizes in a major article “You up there!” that in Germany twelve family clans own as much as the poorer half of the German society together.

The double standards, not completely atypical for large medium institutions, consist of the fact that the STERN belongs to exactly one such family clan, which, of course, is never spoken about. The STERN belongs to the publishing house Gruner + Jahr, a Bertelsmann Media Group company, which is significantly controlled by the German Mohn family.

If a family owning an enormous number of shares is morally reprehensible, as STERN claims in its article, then the existence of STERN itself is reprehensible.

Then what’s right?

(2) But let’s turn to the sphere of fundamental ethical considerations: If the STERN obviously considers large family shareholdings to be reprehensible, it should have indicated what it considers to be right instead:

  • Are large corporations or companies reprehensible in themselves and STERN wants to make itself strong for medium-sized companies? In any case, it has not been noticed so far, there are examples where STERN also places these medium-sized companies general suspicion.
  • When corporations are allowed as such: Are large corporations only reprehensible if the majority of shares are owned by families? Then the solution would be large-scale free float, completely without major investors, i.e. a large number of people owning a little.

If that’s what’s meant, I have two questions about the alternatives:

  1. It is generally said that responsibility and sustainability are much more assured in corporations with highly committed families than without such families, where in the end no one is actually available as responsible, but in scandals personnel are simply exchanged and the so-called shareholder value determines everything.
  2. Who will ultimately exercise control when share ownership is completely distributed among a large number of people who own little? Wouldn’t it then become even less transparent how the board of directors is selected, because the mass of shareholders will rarely be able to attend shareholders’ meetings and will hardly be able to assess the candidates for the board of directors. And will the people who are then appointed to the board show as much responsibility as representatives of family fortunes tend to do? After all, in large companies the issue is never just about pure assets, but also about the power of control, and somehow from the mass of small investors a majority for the election of the board has to be formed.

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