Canberra Not

Without a profit motive, what’s the biggest organisation one can run in an effective manner?

Well, any country is generally a ‘not for profit’ and these are big. The UN. The Catholic Church. FIFA. The IOC. Yada, all the way down to your local sports club.

However at some point, say above 100 people, the managers of these ‘not for profits’ generally figure out a way to extract profits even though dividends and share sales aren’t an option.

Generally this is called rorting or corruption, this can include favours for people with brown paper bags, high salaries, job perks, generous contracts to personally owned service companies, the cheap sale of assets, and the like.

Since this behavior is anti correlated to good corporate leadership (because I assert so) there is a problem that needs fixing.

My pet proposal, designed to annoy quasi-socialists with two cars and kids in private schools, is that all of these ‘not for profit’ entities are semi-privatised.

They wouldn’t have shares as such but non-transferable shadow stock gifted to all stakeholders on an equitable basis; and these would yield dividends.

This way the leaders of these entities can get their dreams fulfilled with salary bonuses related to dividend yields but their efforts in this regard would be constrained by other stakeholder needs, and communicated to management through the compulsory voting process for board directors, certain compulsory shareholder voting matters (no vote, no dividend) including the appointment and otherwise of CEOs.

I’m telling you, if all Australians received an annual cheque from the non-retained annual profits of the Federal Treasury, we’d be taking the whole Canberra thing a lot more seriously.

In fact there wouldn’t even be a Canberra. It’d either be sold to the Chinese or written off as a fully depreciated but cashflow hungry asset. Government would sensibly move to Sydney – probably in some cheap arse mid-sized block in the Paramatta CBD.

Politics would move to the business pages and be a lot saner. This would open up space at the front of the papers for a little foreign reporting. Yada.