196 InManagersWeTrust
Sources for determining that orientation abound, probably more
so in the United States but increasingly throughout the developed
world. In the United States, corporations disclose volumes of infor-
mation to shareholders and other interested people. Many corpora-
tions go beyond legal requirements, producing substantial informa-
tion on their Web sites and Webcasting archives and you can get
plenty of high-quality and reliable information from publications by
reputable industry analysts such as Standard & Poor’s, Dun & Brad-
street, and Robert Morris Associates as well as government agencies
such as the Federal Trade Commission. Use your imagination.
Sift through these materials in looking for managers who act like
stewards of shareholder capital. Use it to find the best managers,
those who think like owners in making business decisions and who
adopt an attitude of partnership, embracing shareholders as mem-
bers of the enterprise rather than as strangers to it, those you would
be happy to invite over for a Super Bowl party.
However, even owner-oriented managers sometimes have inter-
ests that conflict with those of shareholders. Wor kto identify and
invest with those who make a habit of easing those conflicts and
nurturing managerial stewardship of owner funds, those who exhibit
Aristotelian ethical virtue.
It is not easy to detect governance indicators of an owner ori-
entation in place at a corporation any more than it is to detect the
financial or managerial performance or even value of a corporation
from its financial statements. However, as with that effort, it is worth
the work.
The difficulty and the possibility exist because the law requires
very little of corporate governance. Yes, federal securities laws im-
pose extensive disclosure obligations, though most of what they call
for probably would be produced voluntarily by good companies par-
ticipating in a vibrant market economy anyway. Yes, state laws im-
pose duties on directors and managers, but those duties are loose
and general. Some statutory rules or limits are imposed, but they
are either highly formal and therefore malleable or pretty meaning-
less as a practical matter and can be altered in corporate by-laws or
charter documents.
Corporate governance as such is not necessary. Many advocates
of corporate governance argue for reforms directed toward compel-
ling an owner orientation, usually described as aligning management
and shareholder interests or enhancing board oversight of CEO per-
formance. If a company needs these mechanisms to create an owner