Decoder with Nilay Patel Recode Decode: SEC Commissioner Robert Jackson
Nov 15, 2019
Robert Jackson, a former SEC commissioner, discusses critical issues surrounding corporate governance and dual-class stock systems. He sheds light on how companies like WeWork and Facebook maintain founder control, which can stifle accountability. Jackson reveals his opposition to rule changes that limit shareholder activism and critiques the SEC's handling of Elon Musk's Tesla settlement. The conversation emphasizes the necessity for reforms to promote investor rights and ensure better governance in the tech industry.
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Pro-Business vs. Pro-CEO
- Pro-business does not automatically mean pro-CEO.
- Historically, Wall Street was pro-investor and pro-value, aligning with activists who often increase value.
Dual-Class Stock Concerns
- Dual-class stock, while potentially beneficial for visionary founders early on, raises concerns about long-term accountability.
- Perpetual dual-class stock can create a class of corporate royalty, controlling companies for generations.
Google's Android
- Google's development of Android is cited as an example of how dual-class stock can enable long-term innovation.
- The structure shielded Google from short-term pressures, allowing them to invest in the platform's development.