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A New Age of Shareholder Democracy | Sam Stubbs | TEDxAuckland


we voted this year in our general
election and we had a vote because we
live in a democracy an institution two
and a half thousand years old and it’s
the worst form of government except for
all the others and we voted because we
care because in the words of Edmund
Burke the philosopher the only thing
necessary for evil to triumph is for
good people to do nothing and when we
vote we vote in governments with awesome
powers over our lives they pass laws
which bind us they levy taxis which we
must pay and we grant them control over
fully one-third of our economy because
in a democracy the biggest business in
town is government but it’s not that
one-third of the economy I’m interested
in I’m fascinated by the other
two-thirds because that is governed by
another institution in which we also
have a vote here is its story and why it
really matters in 1602 the Dutch East
India Company was formed the world’s
first ever company
and the purpose was to send ships out
into the known and unknown world in
pursuit of spices and these voyages were
expensive and risky and so in order to
share in the expense and the rewards
ordinary citizens were invited to invest
and so in the company of others you
would invest and hold a certificate
entitling you to a share of the profits
of the ship
you are a shear holder and in fact in
this case you really were a shareholder
because your share of the profits were
in the hold of the ship and so began a
modern company and what a phenomenal
success it has been because think about
what the modern company does 400 years
later in our lives it feeds us it
clothes us it transports us and it
entertains us and the decisions of the
biggest most significant companies are
surely as important as those of
governments themselves because when
Shell and BP and Exxon decide to take a
stand on global warming their decisions
will matter as much as most governments
and when Amazon decides to enter a new
country the whole market changes and
when Apple and Tesla innovate the world
holds its breath so here’s what I don’t
understand if these companies are so
important to our daily lives if their
decisions are so vital if they are so
powerful why is News Business News at
the back of the paper
and this stuff at the front shouldn’t it
be the other way round well in one level
we know why that’s the case this is
entertaining this is fun I know it is
because I can see you looking at it you
can’t take your eyes off it can you
by contrast business is just boring dry
complicated language but there is one
thing that unites the personalities and
the politicians and businesses better
that we don’t feel like we’re in control
we have no control it’s amusing so this
gets to be the caffeine of our daily
life while business gets to be the
sleeping pill but in no circumstances do
we feel as if we have control but I
think times are changing I think we are
about to
a whole new world where we feel as if we
have a lot of control and a lot of
influence via the companies we invest in
I think the times are a-changing and the
reason i think that is because nothing
is as powerful as an idea whose time has
come and what is that idea well pardon
the boring business slide but it’s
KiwiSaver this is what’s happening in
New Zealand and it’s happening all over
the world with 401ks pensions
superannuation schemes we the citizens
are investing more and more in the
countries we live in and the companies
we do business with this is the
KiwiSaver chart in 10 years 2.8 million
New Zealanders have joined up it’s the
most popular financial product since the
cheque book and collectively we have 43
billion dollars invested in companies
now and by 2030 that will be two hundred
billion two hundred thousand million
dollars and this is a phenomenon which
is happening all around the world
because today people like ourselves own
36 trillion dollars and companies all
around the world 80 percent of global
GDP so don’t believe it when anyone
tells you it is the wealthy elite and
the few who own and control the
companies of the world no we do we are
their owners we are in charge so here’s
what seems unusual about that we vote
consciously and we consume as conscious
consumers we vote with our values in our
checkbooks every day and yet we have all
this money in these companies and we
know they do stuff but we don’t seem to
exercise our control we don’t seem to
act like the bosses we seem to act like
we’re victims of their actions not the
people who control their actions
well I know that’s not true and I know
that’s not true because I’ve seen us act
like conscious consumers I’ve seen us
act massively effectively
and I saw it right here in New Zealand
last year when the media and the social
media and interest groups became aware
that KiwiSaver managers were invested in
land mines cluster munitions nuclear
weapons and tobacco they said no we
don’t want our money invested in those
companies there is no value alignment
there and that voice was so effective so
loud that the KiwiSaver managers sold
within three months all investments in
these companies now you have to
appreciate folks they’re getting the
finance industry to act collectively and
getting them to do anything within three
months is Teutonic and it was so
effective that the two largest fund
managers in the world who collectively
invest 13 trillion dollars on behalf of
their members 13,000 billion dollars
they launch products available to their
global clients which excluded these
companies as well because they heard the
message when people don’t want these
things in their investments we’d better
do something about it
so we in New Zealand made this happen
this is now the global benchmark for
conscious investing and shareholder
activism we made it happen
feel good it should
there’s an amazing example of this happening on an international scale look
happening on an international scale look at the tobacco industry for decades and
at the tobacco industry for decades and decades tobacco shares were the darlings
decades tobacco shares were the darlings of the stock market huge sales huge
of the stock market huge sales huge profits huge dividends everyone was
profits huge dividends everyone was making a lot of money and no one was
making a lot of money and no one was paying particular attention to what they
paying particular attention to what they were doing but five years ago people
were doing but five years ago people like ourselves globally started telling
like ourselves globally started telling our fund managers our pension managers
our fund managers our pension managers our KiwiSaver managers we don’t want
our KiwiSaver managers we don’t want these companies we don’t want our money
these companies we don’t want our money invested in what they do they do not
invested in what they do they do not align with our values and so what
align with our values and so what happened they started selling them and
happened they started selling them and five years later tobacco companies have
five years later tobacco companies have gone from being a wonderful out
gone from being a wonderful out performer to a horrible investment by
performer to a horrible investment by any standards and the reason is that we
any standards and the reason is that we are depriving them of their corporate
are depriving them of their corporate lifeblood shareholder capital when we
lifeblood shareholder capital when we walk away they die and they are dying a
walk away they die and they are dying a slow and painful and horrible death and
slow and painful and horrible death and you know there’s a McCobb justice in
you know there’s a McCobb justice in that isn’t there given how many deaths
that isn’t there given how many deaths they caused but we don’t have to apply
they caused but we don’t have to apply the stick we don’t have to sell out and
the stick we don’t have to sell out and walk away because when we do that we go
walk away because when we do that we go from being inside the boardroom as a
from being inside the boardroom as a shareholder with influence to outside on
shareholder with influence to outside on the pavement waving a placard and the
the pavement waving a placard and the pressure groups and the interest groups
pressure groups and the interest groups have a valuable part to play but
have a valuable part to play but together when we act as a shareholder
together when we act as a shareholder inside the boardroom we can affect major
inside the boardroom we can affect major change and you know if you’re running a
change and you know if you’re running a company now and you think about the next
company now and you think about the next 20 or 30 or 40 years there are some huge
20 or 30 or 40 years there are some huge challenges and if these companies are
challenges and if these companies are going to thrive they’re going to have to
going to thrive they’re going to have to align with our values because we’re not
align with our values because we’re not only investors we’re consumers and we’re
only investors we’re consumers and we’re citizens and for companies to be
citizens and for companies to be relevant they have to be relevant to our
relevant they have to be relevant to our values so think about the challenges
values so think about the challenges diversity something we’re passionate
diversity something we’re passionate about its simplicity if you are a
about its simplicity if you are a government director in this country you
government director in this country you have a 47% chance of being a woman and
have a 47% chance of being a woman and yet somehow only 17% of company
yet somehow only 17% of company directors a woman this is not a New
directors a woman this is not a New Zealand problem diversity it’s an
Zealand problem diversity it’s an zealand company problem and if you think
zealand company problem and if you think you’re gonna thrive as a company by not
you’re gonna thrive as a company by not tapping the full pool of talent in new
tapping the full pool of talent in new zealand you’re killing yourselves
zealand you’re killing yourselves diversity is not a nice-to-have it’s a
diversity is not a nice-to-have it’s a necessary for your very survival and
necessary for your very survival and think about sustainability because for
think about sustainability because for so long if you are running a company
so long if you are running a company anywhere in the world your shareholders
anywhere in the world your shareholders were saying show me the money pay me the
were saying show me the money pay me the money now make profits short-term but
money now make profits short-term but think about ourselves as investors we’re
think about ourselves as investors we’re going to be investing in these companies
going to be investing in these companies for 20 30 40 50 years we need them to
for 20 30 40 50 years we need them to operate that way operate sustainably
operate that way operate sustainably care about the future so if we’re in the
care about the future so if we’re in the boardroom saying we as a shareholder
boardroom saying we as a shareholder empower you to make less money now so
empower you to make less money now so that you can invest in your future less
that you can invest in your future less money now so that you can harness your
money now so that you can harness your talent create more jobs create more
talent create more jobs create more value long term be more sensible about
value long term be more sensible about the environment isn’t that a good thing
the environment isn’t that a good thing to happen isn’t it the New Zealand we
to happen isn’t it the New Zealand we all want to live on and think about pay
all want to live on and think about pay equity and pay fairness someone has to
equity and pay fairness someone has to be sitting in the boardroom looking the
be sitting in the boardroom looking the CEO in the eye and saying if you are
CEO in the eye and saying if you are paying yourself as if you are human
paying yourself as if you are human capital but you’re paying your workers
capital but you’re paying your workers like they’re a human expense you’re
like they’re a human expense you’re going to do something about that because
going to do something about that because what you pay yourself may be great for
what you pay yourself may be great for your wallet and your bonus and your
your wallet and your bonus and your share options but it’s not necessarily
share options but it’s not necessarily good for your employees and it’s
good for your employees and it’s certainly not good for shareholders you
certainly not good for shareholders you know there are people out there who
know there are people out there who think these things sustainability
think these things sustainability diversity pay equity are just crazy
diversity pay equity are just crazy things they’re just things you can’t
things they’re just things you can’t achieve they’re too hard to do we
achieve they’re too hard to do we haven’t done it so far the mountain is
haven’t done it so far the mountain is too high to climb or I got to tell you
too high to climb or I got to tell you folks last year we kind of pretty high
folks last year we kind of pretty high mountain and as far as I know it
mountain and as far as I know it Kiwis are bloody good at climbing
Kiwis are bloody good at climbing mountains we found its simplicity as a
mountains we found its simplicity as a non-profit KiwiSaver which gives 15% of
non-profit KiwiSaver which gives 15% of its fees to charity we’re a non-profit
its fees to charity we’re a non-profit because we want our members to be as
because we want our members to be as wealthy as they possibly can be when
wealthy as they possibly can be when they retire so they have the dignity and
they retire so they have the dignity and the choices that more money gives them
the choices that more money gives them and we care about charity because we
and we care about charity because we want to live in a charitable society
want to live in a charitable society quite and quite honestly folks when it
quite and quite honestly folks when it comes to the finance industry in charity
comes to the finance industry in charity somebody’s got to lead from the front
somebody’s got to lead from the front but we passionately believe that the
but we passionately believe that the role of a KiwiSaver manager and the
role of a KiwiSaver manager and the person who looks after your assets is to
person who looks after your assets is to be a long-term stakeholder and
be a long-term stakeholder and businesses to think about the future and
businesses to think about the future and invest for the future be a stakeholder
invest for the future be a stakeholder not a shareholder because it’s a really
not a shareholder because it’s a really beautiful story when it happens a
beautiful story when it happens a company that is invested in thinks
company that is invested in thinks sustainably and because it does the very
sustainably and because it does the very best people want to work for it and
best people want to work for it and because they work for it they produce
because they work for it they produce the best goods and services and people
the best goods and services and people pay a premium for those goods and
pay a premium for those goods and services because they like the quality
services because they like the quality of them and they like the values of the
of them and they like the values of the company and so the company makes more
company and so the company makes more money and because it makes more money it
money and because it makes more money it pays more taxes to fund the schools and
pays more taxes to fund the schools and hospitals and it pays the shareholders
hospitals and it pays the shareholders ourselves Kiwi savers more money and
ourselves Kiwi savers more money and then it can reinvest in its future again
then it can reinvest in its future again reinvest in its people create the new
reinvest in its people create the new jobs so ladies and gentlemen when we go
jobs so ladies and gentlemen when we go forward to the next election be mindful
forward to the next election be mindful that we have more than just one vote we
that we have more than just one vote we can vote for the government and we
can vote for the government and we should and we should care about it
should and we should care about it because their decisions matter but every
because their decisions matter but every day now as conscious consumers we can
day now as conscious consumers we can vote our values with our wallets and our
vote our values with our wallets and our purses but perhaps we have now the most
purses but perhaps we have now the most important vote of all how our money is
important vote of all how our money is invested because when you vote for your
invested because when you vote for your KiwiSaver manager when you vote for the
KiwiSaver manager when you vote for the person who manages your money you are
person who manages your money you are empowering them to speak with billions
empowering them to speak with billions of dollars on behalf of millions of
of dollars on behalf of millions of Kiwis and their decisions will really
Kiwis and their decisions will really really matter and if you don’t like
really matter and if you don’t like their values if you don’t know their
their values if you don’t know their values if you don’t understand what
values if you don’t understand what they’re about
they’re about then he’ll switch it takes two minutes
then he’ll switch it takes two minutes online these days it’s faster than
online these days it’s faster than voting and so just like in 1602 when
voting and so just like in 1602 when those ships sailed out into uncertain
those ships sailed out into uncertain waters we are sailing our ship of state
waters we are sailing our ship of state into uncertain waters
into uncertain waters the future and we are all shareholders
the future and we are all shareholders in the ship of state and so as we do
in the ship of state and so as we do this
this be mindful be mindful that bad things
be mindful be mindful that bad things happen when good people do nothing but
happen when good people do nothing but be tremendously excited by the fact that
be tremendously excited by the fact that wonderful things happen when good people
wonderful things happen when good people care thank you
care thank you [Applause]
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