This week I watched two great debates about what type of company structure is best for local people. The first one was over our biggest and most influential company - the future of New Zealand Inc.
Fonterra's farmer shareholders debated the Trading Among Farmers (TAF) proposal that would see outside investors buy units in a fund that owns the rights to dividends from Fonterra, and any gains or losses in Fonterra's shares. But these units will not give their owners any voting rights or the ability to influence Fonterra's milk price.
Farmers were concerned that outside investors would do the wrong thing for the future of the company. Fonterra's board was at pains to say the TAF ensured that outside investors would have no role in deciding the strategy of Fonterra.
Fonterra's farmers voted more than 66 per cent of their shares in favour of the proposal, and it will go ahead from November. TAF is a testament to the ambivalence many feel about the model of publicly listed companies driven by professional managers working to boost shareholder returns, often in the short term.
The second debate was in Parliament and the result was different. The National-led coalition duly passed the Mixed Ownership Model Bill. It is worshiping at the foot of the theory that companies work best when they are driven to provide the best returns for shareholders. But in the wake of the global financial crisis, many experts are asking whether the shareholder-value model is toxic in the long-term for workers, customers, shareholders and economies.