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On the Verge of a New Era

February 18, 2020 by

Shareholder capitalism is an untenable model because the pursuit of individual short-term interests does not result in a stable, efficient and just balance in the economy nor in society. That is the major conclusion of a book by two prominent Dutchmen: Kees van Lede, who was amongst others CEO of AkzoNobel, chairman of employers organization VNO-NCW, chairman of business school Insead and member of the advisory board of JP Morgan; Joris Luyendijk is a journalist.

The authors do not have a ready alternative for shareholder capitalism but they are convinced that the world is ready for a correction, even on the verge of a new era. Pessimism is for losers, as the title of the book says, and optimism is a moral duty. They do however have some practical recommendations: higher inheritance taxes, higher wealth taxes, more investments and less savings, share packages for employees.

The book is set up as an email exchange between the two men, in which Kees van Lede is the seasoned business leader and insider in the circles of power and Joris Luyendijk takes the position of a younger generation, who can ask tough questions. For example: Henry Kissinger was a colleague of Kees van Lede in JP Morgan’s advisory board. Isn’t Van Lede bothered by his war crimes? What is really happening in the back rooms of the Bilderberg Group and the Trilateral Commission where the rich and powerful are hobnobbing? Van Lede answers most of those questions but not all of them. Luyendijk points to the fact that the two men might be different in age and profession but that they both are white, heterosexual men from middle-class families. He thinks that social class is a much more important determinator of division in society than generation.

The authors exchange views on power, social responsibility, climate, Brexit, and much more. The book is well-written, full of insights, nuanced, sometimes even funny. An important part of their conversation is about the individual interests of managers and how those relate to the interests of the company or society. Does Big Pharma for example have a responsibility for the quality and affordability of the healthcare system? They both determine that there are far more upsides when you are a top manager than downsides. You have interesting work, meet interesting people, are well-paid, have lots of influence. You only get into legal problems if you really make a mess of it, almost deliberately.

Van Lede writes that it is not inherently wrong to link the interests of management and shareholders by offering shares and options as a part of top executive remuneration but that this requires an unyielding will from those managers to keep aiming at the greater good for the organization beyond their individual interests. He was amazed and irritated how much time he had to spend on the remuneration packages of individual top managers when acquiring companies in the UK and how those executives held the negotation process hostage for their personal financial benefit.

Van Lede doesn’t believe that rules and regulations will result in the ‘right’ behavior of individuals. He thinks it is all about normal decency and individual morality. Unfortunately the authors don’t tackle the question who determines what is right and what is wrong and how non-executives should incorporate the moral dimension when they apppoint a new CEO.

The funniest quote in the book comes from Dutch business leader Cornelis Verolme, who said: “The ideal board consists of an odd number of people, and three is just too many”.


Kees van Lede, Joris Luyendijk. Pessimisme is voor losers. Op de rand van een nieuwe tijd. Balans, 2020