Those pesky shareholders...why don't they leave us directors alone and let us play?

This is written in response to the article entitled Corporations Should Not Be Democracies written by Lynn A. Stout and published in the September 27, 2007 edition of the Wall Street Journal and can be found at http://www.law.ucla.edu/docs/stoutoped.pdf.

What Professor Stout fails to remember that being a shareholder entitles the shareholder to certain rights and that includes voting for directors and setting policy through shareholder initiatives. Being a shareholder mean being an owner with all the rights and responsibilities of ownership

It appears that what Professor Stout advocates is that all decision be left to the good judgment of the board of directors. We need only look at recent history to see how poorly many boards of directors do their jobs. The scandals at Enron, Tyco, and Hollinger International show how timely intervention by a vigilant board of directors could have averted tragedy.

Shareholder activism has always been with us in one form or another. Only recently has it become a major issue is because more and more large block holders of shares such as pension funds and private equity firms are starting to flex their muscles and are exercising the rights that have been theirs all along. It appears that Professor Stout is not comfortable with that.

There is an easy way to cure share hold activism and that is to not use the public equity markets for funding. If directors are so concerned about being able to develop and execute policy with the "interference" of stockholders, then they should simply use their own monies or offer debt in the public debt markets and buy up all the shares.

I am quite certain that the level of scrutiny that a board gives to corporate activities will rise in direct proportion to their own level of ownership.

Change of Control at Stroger Hospital

This is in response to the article written by Mike Colias entitled Panel Eyeing Hospital Shift: Durbin's Group Likely to Urge Taking Control From Stroger http://www.chicagobusiness.com/cgi-bin/news.pl?id=26383 that appeared on page one of the September 17th, 2002 Crain's Chicago Business.

This article really brings home the point about how there is often nothing really new, just things that keep coming around. This is especially true about the idea proffered by a number of politicians that the Cook County Bureau of Health Services should be run by a commission and not by the County Board.

If you read the book The Old Lady on Harrison Street by Dr. John G. Raffesnperger, you will find out that the efforts to keep the county hospital system free of political patronage and interference are as old as the hospital itself. One may also learn that at one time in the not to distant past, the hospital was run by an independent board.

If this idea is to work two things must happen. First, leaders in government must learn from the mistakes of the past and understand what were the circumstances that cased the independent boards of the past to be disbanded and second, there must be airtight assurances of independence by the new governing body that all decisions, especially about hiring and contracts, will be free from political interference. The new board must be made up of dedicated health professionals who specialize in public health.

I was amazed when I read Dr. Raffesnperger's book how coveted was a place on the house staff of Cook County Hospital was or how keen the competition for a residency was. Can the same be said today under the leadership the county health services has had in recent years.

The Cook County Bureau of Health Services can become a model for health deliver services nationwide if only there is the political will to stop making the county health service (and all county government for that matter) a dumping ground for the politically connected to collect a paycheck.

The citizens of this county deserve nothing less than a world class health service and will be willing to pay for it if proper governance of it is in place.

Anti-Israel Lobby

This is in response to the article written by Mr. Jeff Robbins and entitled Anti-Semitism and the Anti-Israel Lobby published on 7 September 2007 in the Wall Street Journal http://online.wsj.com/article/SB118912590978320145.html?mod=rss_opinion_main.

When will the people of this nation really understand what side of the bread is buttered when it comes to Middle East. I would submit this for your consideration: What nation has the closest thing to a fully functioning democracy in the Middle East? What nation in the Middle East has the greatest press and civil liberty freedoms? What nation has done what the US has asked more times than not, including exercising great restraint of its armed forced during the 1991 Gulf War. The answer to all these questions is Israel.

Israel is the best friend the US has in that region, but too many elitist pundits and policy wonks wish to continue to try and placate regimes that harbor terrorists, promote extremism and keep their populations under tight control. Maybe many people have forgotten but I haven’t forgotten the fact that the majority of the September 11 terrorists were of Saudi Arabian birth. In addition, too man US defense and industrial firms find they can get a bigger market for their wares in the Arab world than in Israel. That’s not the tune they piped a few years ago when the old Soviet Union supplied the Arab nations with all their weapons and the US supplied Israel.

The US has got to break away from dependence on a resource (oil) that is controlled by nations that wants the American people to think they are our friends but are simply looking out for their own interests and policy ends, which, in my opinion, includes the destruction of the state of Israel. Once we as a nation do that, then our relationship with the Arab world can take on a different hue in that we can speak truth to their power and not have to worry about the consequences in terms of their flow of oil to the US.