Is it not obvious that society has an interest here which is being jeopardised? I have summarised the first of the reforms necessary. to protect that interest under the general heading " A Reform of Company Law," for it is a question of scale.
A private individual who acts in this anti-social manner does relatively little harm, but when capital sums of hundreds of thousands, or even millions of pounds are thrown into play, the damage inflicted on the community may well be mortal.
Now. of course, with the rapidly changing methods of industry and of the social structure generally it may be very difficult for the law to foresee every contingency and forestall every kind of abuse, but it is certainly possible to establish as a principle of law the proposition that company directors have a wider responsibility than that whir h they owe to their shareholders, that they are in point of fact trustees for the community.
One of the first results of this would he the insistence on a far fuller statement of the affairs of companies in their published accounts. Such a statement would include a detailed trading account showing not their net but their gross profit and their various items of expenditure, such as advertising, wages, materials, and so on. Further, every salary, fee, or other emolument should be published for everybody to see.
No Objections
I can think of no objections to this that arc not discreditable. Either the business man and the business executive is the servant of the public, or his whole existence is morally indefensible, and if he is a servant of the public there is no reason that the public should not be informed about how much it is paying him precisely, as it can inform itself about the earnings of any Civil Servant in the appropriate books of reference.
But, as I shall show in my next article, a reform of company law would almost certainly have to go hand in hand with the creation of a certain amount of new machinery and in the recasting of much of the machinery we have taken over from the past.