Any system can generate successful outcomes, at least occasionally. Any system can be subverted. Some systems are more likely to be doomed by undermining the inventive relationship between risk and reward, but that can happen in systems ostensibly aimed at that attribute because of corruption in the way information is reported.

It is true that selling ownership shares in return for the cash to fund a business plan has made a great deal of innovation possible that could not have happened otherwise. And it was a democratic move away from innovators seeking patronage from the noble/royal classes, which is how it was done previously.

But any system can be corrupted. There is nothing wrong with requiring those who run publicly held companies from being transparent and truthful. Some recent regulations, however, have also limited the way in which business decisions can be made, which have placed publicly held corporations at a disadvantage versus privately held and overseas corporations. In my experience, it limited business opportunities significantly.

All corporations have boards of directors, no matter who owns the stock. If the person with the real vision is does not control the board, the board may fight that vision. If it's the right vision (exampe: Apple), that can undermine the company. That's why Jobs left Apple, and only came back when he could have that control. If it's the wrong vision, the company will struggle to survive in any case (example: GM, Kodak).

When people invest in a company because they believe in that vision, publicly held ownership is at its best. When they invest for short-term financial objectives, and don't know anything about that vision, then it undermines the value of public ownership. If enough of the ownership comes from that perspective, the board will eventually reflect that perspective and the vision will be subdued or subverted.

Apple reminds us how important it is for the CEO and board to understand the company's products and the vision for where to take those products. Too many current coporations are run by "managers" instead of people who have real expertise in the product technologies central to the company. That is an outgrowth of the desire to make companies look good to the investor classes who are disconnected from a company's mission.

Rick "not seeing the issues in just black and white" Denney