It's very true that in any group of multiple people with multiple goals, some folks won't be able to get their way. Similarly, if Qualcomm decided to make long term investments, the short termers couldn't get what they wanted.
That's one of the beautiful things about shareholder democracy in liquid, public markets - exit is always an easy option. (Compare and contrast to, e.g., political democracy, where exit is highly costly and sometimes impossible.)
Well, shareholder exits can be costly too. But this discussion and the one with golergka inspired the following idea (probably because the idea of political democracy came up in both threads).
Stay with me here. It's not fully fleshed out- just kind of a spark: What if, in some fair way I don't know yet, the employees of a public company had some (40%? 51%? I don't know but significant) power to force a shareholder to sell his or her share of the company in a short time frame (30 days?).
This would bring the analogy to political democracy a little closer because the "subjects" would have the direct power to throw out their "governors." We could argue that they have the indirect power now (especially in small companies), but this would make it explicit.
That is pretty crazy. Similarly, imagine if X% of your SAAS vendors could vote to buy your shares - if Google and Amazon like your business, and if you use gmail + AWS, they can vote to buy you out and you've got no say in the matter.
Employees aren't "subjects" and their boss isn't their governor. Shareholders are owners, that's why they get a vote. Employees, SAAS vendors, janitorial service companies, etc, are just people selling stuff.
I would argue that employees have a larger stake than contractors and vendors. They would also want to do the right thing by the company. The whole idea is to broaden the idea of governance to more stakeholders than just the owners. It would certainly give guys like Carl Icahn pause. On the other hand, perhaps sometimes what he does needs to be done, and this would make it harder. That's why the employees should only have a partial say, but enough of one so that they are a legitimate threat if an activist investor can't muster very much support on the board.
Employees have no reason to do the right thing by the company - the best thing an employee can do for himself is get paid all the money. It's hard to see why their stake is higher than a vendor. In both cases, they have rendered a service in return for money and have no further stake in the company.
Overall, employee involvement in decisionmaking creates significant principal/agent problems. Consider this article, which suggests many employees care so little about shareholder value that they will sacrifice the latter for petty revenge against third parties (their boss): http://www.nytimes.com/2015/06/21/opinion/sunday/is-your-bos...
You're right about the vendor thing. I have a hunch that changing a job under duress is more stressful than finding a new customer (vendor), and thus employees would be somewhat more inclined to have long term stability, but I certainly can't prove it and I'm not entirely convinced of it.
As to the idea that employees will sacrifice shareholder value (of which they have, roughly, zero) in order to feel better about working (revenge feels good, after all), perhaps that is not unexpected. In my scenario, the employees would have another outlet: they could make it clear to the board that they won't tolerate toxic managers. As things stand, a smart board (I would argue) understands this today, but things get awfully muddy in the real world.
What the proposal does is broaden the conversation from just considering shareholders to another group of stakeholders.
