Union Corruption

SirRumpole said:

I don't, do you ? They may well be a lot tougher than private enterprise, if you have no experience of the public sector then you can't say either way.

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I have had plenty of experience with public servants over the years even in local government here and have observed plenty in the media, so don't tell me I can't say either way.....I have no doubts I have had more experience with public servants than you have had in company business.

noco said:

I have had plenty of experience with public servants over the years even in local government here and have observed plenty in the media, so don't tell me I can't say either way...

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And you have scrutinised their credit cards have you ?

SirRumpole said:

It hasn't seemed to have worked with exhorbitant executive salaries and golden handshakes for failure, so I see no reason to assume that expenses are strictly controlled.

The data is the excessive salaries that the Boards give to their execs with golden handshakes for failure. Why should we assume that the Boards minutely scrutinise credit card expenses ?

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So you don't have data to back up you claim, just assumptions.

Salaries and other forms of compensation are reportable, so the shareholders know whether these are justifiable or not (that is what we are talking about isn't it; shareholders being informed). If the board is seen to be making unjustified payments, then shareholders have the opportunity to vote them out. There is also the 3-strikes rule.

I'm not going to claim that these shareholder protections are fully satisfactory, but there are methods in place to inform shareholders and to allow them to take some action.

If in the end the shareholder feels that there is nothing he can do to rectify things then there is always the option of selling their shareholding. Union members do not have the option of cancelling membership, as often being a member is a requirement to get the job.

That is the fundamental difference between union, political and shareholder membership. The shareholder has an upfront choice whether to buy the shares or not and can usually find information on the propriety of the company before getting involved. Unions are often a no choice option for employees and even if impropriety is discovered, usually by whistleblowers or revelations coming from court cases, there is often little they can do. The same goes for politicians. You are pretty much stuck with what you have got and even if in a marginal electorate, the alternative choice of candidate might have no influence if not a member of the governing party.

Detailing and explaining executive expenses to the public is just an expensive waste of time and resources and of little benefit.

bellenuit said:

Union members do not have the option of cancelling membership, as often being a member is a requirement to get the job.

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So why has union membership been consistently falling for decades ?

"Trade union membership has plummeted since the late 1980s and the 1990s when more than 40 per cent of Australian workers were union members. At August 2012, the most recent figures available from the Australian Bureau of Statistics, only 18 per cent of the workforce were union members. There was a slight pick-up in union membership among men during the global financial crisis but by and large union membership has stabilised at about 18 per cent since 2007 when Labor was returned to power on the back of the Work Choices campaign."

"A series of conservative governments at state level and then the Howard federal government made compulsory unionism illegal."

http://www.smh.com.au/national/the-union-movement-is-facing-tough-times-20140131-31sb7.html


So that rather destroys your point on the difference between unions and companies. They both spend their members/shareholders money and they both should be subject to equivalent levels of scrutiny on that spending.

bellenuit said:

That is the fundamental difference between union, political and shareholder membership. The shareholder has an upfront choice whether to buy the shares or not and can usually find information on the propriety of the company before getting involved

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That's the point isn't it ? How can prospective or current shareholders determine if execs are rorting their expenses if they are not revealed ? Can I go to the registered office of BHP and say "I'm thinking of buying shares and I want a look at the exec's credit card statements ?

So there is extremely limited "upfront choice" for shareholders, they have to go on trust just like union members.

SirRumpole said:

So why has union membership been consistently falling for decades ?

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I know union membership is falling, but that doesn't mean that membership isn't effectively compulsive in certain industries.

So that rather destroys your point on the difference between unions and companies. They both spend their members/shareholders money and they both should be subject to equivalent levels of scrutiny on that spending.

That's the point isn't it ? How can prospective or current shareholders determine if execs are rorting their expenses if they are not revealed ? Can I go to the registered office of BHP and say "I'm thinking of buying shares and I want a look at the exec's credit card statements ?

So there is extremely limited "upfront choice" for shareholders, they have to go on trust just like union members.

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Shareholders have a simple upfront choice. Buy or not buy. Union members, as I have been trying to explain to you, often do not have the choice. By not joining, they may also be dealing themselves out of a job.

And you keep forgetting the original point I made. Revealing the exec's expenses publicly may be highly damaging to a company if it directly or indirectly leads to the exposure of confidential information and dealings that needs to be kept hidden from competitors or other interested parties. That is why shareholders are content to have the board oversee executive actions.

Apart from you, I am aware of no shareholder clamouring to see a list of the expenses made by the execs in companies in which they have shareholdings. They understand that such information is of little value and providing it would greatly impede the running of the business.

It is a pointless, costly and probably damaging exercise that no one (apart from you) seems interested in pursuing.

bellenuit said:

So you don't have data to back up you claim, just assumptions.

Salaries and other forms of compensation are reportable, so the shareholders know whether these are justifiable or not (that is what we are talking about isn't it; shareholders being informed). If the board is seen to be making unjustified payments, then shareholders have the opportunity to vote them out. There is also the 3-strikes rule.

I'm not going to claim that these shareholder protections are fully satisfactory, but there are methods in place to inform shareholders and to allow them to take some action.

If in the end the shareholder feels that there is nothing he can do to rectify things then there is always the option of selling their shareholding. Union members do not have the option of cancelling membership, as often being a member is a requirement to get the job.

That is the fundamental difference between union, political and shareholder membership. The shareholder has an upfront choice whether to buy the shares or not and can usually find information on the propriety of the company before getting involved. Unions are often a no choice option for employees and even if impropriety is discovered, usually by whistleblowers or revelations coming from court cases, there is often little they can do. The same goes for politicians. You are pretty much stuck with what you have got and even if in a marginal electorate, the alternative choice of candidate might have no influence if not a member of the governing party.

Detailing and explaining executive expenses to the public is just an expensive waste of time and resources and of little benefit.

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You do know there are lot of buildings, not just Trades Halls, owned by companies that are owned by unions? They have executives and everything.

bellenuit said:

Apart from you, I am aware of no shareholder clamouring to see a list of the expenses made by the execs in companies in which they have shareholdings. They understand that such information is of little value and providing it would greatly impede the running of the business.

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They know they would be fobbed off by the company so they don't bother.

I don't believe that release of business expenses would impede the running of the business. It would make execs more accountable and therefore more prudent.

The essential point is that your argument on behalf of businesses is equally valid when used by politicians, public servants or unions. Is the running of a business more important than the running of the country ?

So on that basis if you want to suppress business expense disclosure why not suppress political expense disclosure, because having that information in the public domain would greatly impede the running of the country ?

If you say that business expenses are a matter between the company and the shareholders and no one else's business, then I say that a union delegate's expenses are between the union and the union membership and no one else's business.

As pointed out to you, union membership is not compulsory. If potential members don't want to join a union they have the option of not doing so. Compulsory union membership is illegal. That seems to be the same principle to me as not buying shares.

SirRumpole said:

I don't believe that release of business expenses would impede the running of the business. It would make execs more accountable and therefore more prudent.

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What balderdash. Certain employees of Rio take out a shareholding in BHP and front up at BHP headquarters. "We would like to see the business expenses of Andrew Mackenzie please. OH I see, he spent $10K on a dinner at the Ritz Carlton in New York. Maybe that wasn't a valid expense? To ascertain that we need to know who was in attendance? etc. And he flew to Uzbekistan on the 20th and spent 4 days in Tashkent. Didn't we learn that the Vale CEO was there the exact same time and isn't Tashkent the HQ of XXX Co."

It would only take the most rudimentary of detective work to build up a picture of who the company is dealing with (take over targets, key customers, key suppliers etc). If you then make provisions to redact sensitive information, then you are back to square one, as you cannot tell whether information redacted is because it genuinely is a confidentiality risk or simply a cover-up.

What a nightmare. And do you expect any entry to reveal money was spent at a strip-club in Soho? And even if there were such entries, how could you tell they were not valid business expenses? What if the CEO had asked the customer he was entertaining where he would like to eat and the customer picked the strip club as the venue? It isn't illegal to eat at a strip club if that what the customer wants. You expect all this information to be documented and explained so that it is understandable to someone who owns a $1K shareholding in the business.

A typical CEO might incur 10 - 20 business expenses daily. Do you really think that he should be spending his time documenting those expenses for the benefit of anyone (and it would be anyone) who deems they have a right to see that. That is a bureaucratic nightmare of zero merit.

The essential point is that your argument on behalf of businesses is equally valid when used by politicians, public servants or unions. Is the running of a business more important than the running of the country ?

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I only entered this argument saying how it would be completely impracticable to make such an impost on business. Whether the same should apply to unions and politicians is a different question that you were arguing with Noco (I think).

So on that basis if you want to suppress business expense disclosure why not suppress political expense disclosure, because having that information in the public domain would greatly impede the running of the country ?

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To a certain extent it might impede the running of the country and of unions. I certainly don't want the government to have to disclose expenses relating to some meeting or other that was held in confidence if that information could be damaging. But you must judge the disclosure rules for companies, unions and politicians each on their own merits. What I have said is that the disclosure rules you are suggesting for business are damaging and pointless. You and Noco can argue about the unions and politicians.

As pointed out to you, union membership is not compulsory. If potential members don't want to join a union they have the option of not doing so. Compulsory union membership is illegal. That seems to be the same principle to me as not buying shares.

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Correct me if I am wrong, but I think the point I was making is that union membership is necessary to get certain jobs. Without it, no job. You can choose to not join the union if you don't want, but then you don't get the job. This seems certainly the case in the building industry, especially for those sites where a union is allowed to vet potential employees and decide whether they are going to be taken on or not.

bellenuit said:

And he flew to Uzbekistan on the 20th and spent 4 days in Tashkent. Didn't we learn that the Vale CEO was there the exact same time and isn't Tashkent the HQ of XXX Co."

It would only take the most rudimentary of detective work to build up a picture of who the company is dealing with (take over targets, key customers, key suppliers etc).

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That's a fairly weak argument. If sensitive information was involved the data could be aggregated to "travel expenses" or "dining expenses" or whatever.

There are such things as mobile phones, email and video conferencing these days. Do peole really need to spend 5 nights in Aspen during the ski season to "entertain" clients ? That's no different to Julie Bishop using taxpayer funds to go to the AFL . In other words, "rorts".

SirRumpole said:

There are such things as mobile phones, email and video conferencing these days. Do peole really need to spend 5 nights in Aspen during the ski season to "entertain" clients ? That's no different to Julie Bishop using taxpayer funds to go to the AFL . In other words, "rorts".

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The information is already available via the FBT return and annual audit.

If shareholders are happy enough to pay ~147% on frivolity and not ask if there is a cost benefit, they deserve lower ROIs ....IMHO

Tisme said:

The information is already available via the FBT return and annual audit.

If shareholders are happy enough to pay ~147% on frivolity and not ask if there is a cost benefit, they deserve lower ROIs ....IMHO

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As long as the same standards apply to unions and delegates are not required to publish their credit card details, then that's fine. If politicians want to make an example out of union officials while leaving themselves and their business mates to follow a lesser standard of scrutiny then that doesn't pass the pub test IMHO.

SirRumpole said:

As long as the same standards apply to unions and delegates are not required to publish their credit card details, then that's fine. If politicians want to make an example out of union officials while leaving themselves and their business mates to follow a lesser standard of scrutiny then that doesn't pass the pub test IMHO.

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Only a dill would know that any of the Abbott inspired commissions are merely for political gain. He lived and still lives life of privilege, with a sanitised view of all things. His idea of roughing it with the low class is to visit aboriginal communities for a week with the press and all mod cons in tow.

The unions are merely a whipping boy to the Libs. An easy bogey that gets them votes. That's not to say unions are innocent victims, but to merely point out that people like Tony are willing to jump into gutter politics if it means power.

Tisme said:

Only a dill would know that any of the Abbott inspired commissions are merely for political gain. He lived and still lives life of privilege, with a sanitised view of all things. His idea of roughing it with the low class is to visit aboriginal communities for a week with the press and all mod cons in tow.

The unions are merely a whipping boy to the Libs. An easy bogey that gets them votes. That's not to say unions are innocent victims, but to merely point out that people like Tony are willing to jump into gutter politics if it means power.

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As far as the CFMEU goes , it's pretty obvious that this is a bunch of thugs who will do whatever they can to enrich themselves at the expense of their members and something should be done about them, but taking a broad brush approach and applying restrictive legislation to every union is not the way to go.

Charge union officials with fraud if a case can be proved, the same goes for politicians and business execs, all of whom seem to think they are living in an ivory tower paid for by others.

SirRumpole said:

As far as the CFMEU goes , it's pretty obvious that this is a bunch of thugs who will do whatever they can to enrich themselves at the expense of their members and something should be done about them, but taking a broad brush approach and applying restrictive legislation to every union is not the way to go.

Charge union officials with fraud if a case can be proved, the same goes for politicians and business execs, all of whom seem to think they are living in an ivory tower paid for by others.

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There has already been over 100 union officials charged on over 1000 offenses.

SirRumpole said:

As far as the CFMEU goes , it's pretty obvious that this is a bunch of thugs

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Well yes and no. I have certainly been given a going over by more "moderate" unions and it sticks in my craw to think I can't retaliate in kind. Insofar as the CFMEU, like any mob, the rank and file are generally rather convivial, but put them in a pack and have a spiteful steward whip them in to a frenzy ....you know just like Tony Abbott does to the LNP.

SirRumpole said:

That's a fairly weak argument. If sensitive information was involved the data could be aggregated to "travel expenses" or "dining expenses" or whatever.

There are such things as mobile phones, email and video conferencing these days. Do peole really need to spend 5 nights in Aspen during the ski season to "entertain" clients ? That's no different to Julie Bishop using taxpayer funds to go to the AFL . In other words, "rorts".

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Isn't that what I just said. If you redact the sensitive parts, how do you know the expense is justified. If an item just listed as "dining expenses" and to the value of $10K, what does that tell you about whether the expense is justified or not.

Do people really need to spend 5 nights in Aspen during the ski season to "entertain" clients ?

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Yes, if that is what it takes to get the business and many times it is. I know from working with a large tech company that when we invite customers to dinner (which is expected when we sell to them) and you give them the courtesy of choosing the wines, they will often have no qualms of picking $200 -$300 bottles, even though they wouldn't dream of outlaying that amount per bottle if they were buying for themselves or for just an in-company event.

Also, most business events where suppliers/clients meet are in exotic (to the lay person) locations as that is where the event organisers can attack the biggest crowds. CES, the world's biggest Consumer Electronics Show is held in Vegas. If you are in that industry, you have to be there.

There are such things as mobile phones, email and video conferencing these days. Do peole really need to spend 5 nights in Aspen during the ski season to "entertain" clients ?

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So you not only want to waste their time producing expense lists with all useful information redacted, but you now want to tell them how they should run their business. As I said, spending 5 nights in Aspen may be no choice of theirs and many execs would simply prefer to be back home with their families. I can assure you from experience that mobile phones, emails, video conferencing etc. are day to day communication methods used by almost all companies. But there are times when the personal touch is needed.

You seem to think all execs are like Clive Palmer, Alan Bond or Christopher Skates. They were flamboyant execs who had excessive control of the companies and ran their companies as if they were their own piggy banks.

That is certainly not the real world.

A final point regarding aggregation of expenses is that they are aggregated and published in their profit and loss report, usual under Sales Expenses. Providing useless detail is just a silly impost.

bellenuit said:

You seem to think all execs are like Clive Palmer, Alan Bond or Christopher Skates. They were flamboyant execs who had excessive control of the companies and ran their companies as if they were their own piggy banks.

That is certainly not the real world.

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They existed, therefore they are part of the real world.

People like them are the reasons new laws needed to be introduced to protect shareholders.

https://www.crikey.com.au/2009/03/19/curbing-golden-handshakes-nothing-succeeds-like-failure/

bellenuit said:

So you not only want to waste their time producing expense lists with all useful information redacted, but you now want to tell them how they should run their business.

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Now, here is where we get into the arrogance factor. Company execs do NOT OWN the business, the shareholders do. If you run your own business then you can spend your own money. If you spend other people's money then you are accountable to them.

Finally, this discussion started with the repeal of laws in Queensland that required union delegates to publish their credit card statements.

All I'm saying is that if unions should be required to do this, then so should businesses and politicians.

THE END.

SirRumpole said:

They existed, therefore they are part of the real world.

People like them are the reasons new laws needed to be introduced to protect shareholders.

https://www.crikey.com.au/2009/03/19/curbing-golden-handshakes-nothing-succeeds-like-failure/



Now, here is where we get into the arrogance factor. Company execs do NOT OWN the business, the shareholders do. If you run your own business then you can spend your own money. If you spend other people's money then you are accountable to them.

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You haven't explained how producing a list of expenses aggregated in some sort of way to provide anonymity both of people and of location could in any way make an exec accountable. And how would you even know that the aggregations are true? Even if, for instance, you specified how many were involved, such as "Dinner with 5 guests", how could you know whether the guests are legitimate business parties of some sort, or just some mates he wants to treat out at the company expense.

Of course, one could take a random sample and audit them. But the financial accounts of the company are audited and the auditor puts his signature under penalty that the accounts fairly represent the transactions of the company.

You just seem to be flaying around with a proposal that has NO useful utility to anybody, but puts a huge impost on the company to comply. This and the fact that other than you, no shareholder or shareholder group has ever asked for such information.

You do realise (or perhaps you don't) that execs are put there by the board because they are regarded as professionals who will act with integrity in the interests of the company. Some don't and get voted out. But when you put these people in such responsible positions you give them a degree of trust and don't burden them with pointless bureaucracy. If the board suspects rorting, they can have the matter investigated But shareholders in general know that there are sufficient safeguards in place that they don't need to burden their execs with petty bureaucracies, particularly when such bureaucracies would likely, due the the cost and time involved, be detrimental to their own interests as shareholders.

bellenuit said:

If the board suspects rooting, they can have the matter investigated But shareholders in general know that there are sufficient safeguards in place that they don't need to burden their execs with petty bureaucracies.

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As I said before the Boards may be in on the rorts as well. The desire for personal benefit at someone elses expense does not rest solely with union leaders. Politicians and business leaders who attack unionists for being corrupt are in glass houses as shown in various exposes over the years like the "bottom of the harbour schemes" and politicians expenses scandals.

Businesses are in control of much larger funds than unions and you can't convince me that there is no fiddling going on in the name of shareholder benefits.

This and the fact that other than you, no shareholder or shareholder group has ever asked for such information.

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Shareholder discontent is growing.

https://www.australianshareholders.com.au/news/get-tough-remuneration-company-boards-told