Systems of government used by corporations

How big business governs itself. This video was sponsored by Surfshark. Get an exclusive ‪@Surfshark‬ deal! Enter promo code JJMCC for an extra 3 months free at surfshark.deals/jjmcc
In this video we talk about the political systems used by big corporations. How their boards and presidents and CEOs are appointed, and how shareholders use their voting stock options to hold them accountable through corporate democracy.
SUBSCRIBE: kzbin.info?...
FOLLOW ME:
🇨🇦Support me on Patreon! / jjmccullough
🤖Join my Discord! / discord
🇺🇸Follow me on Instagram! / jjmccullough
🇨🇦Read my latest Washington Post columns: www.washingtonpost.com/people...
🇨🇦Visit my Canada Website thecanadaguide.com
Some music by:
Craig Henderson- / @craighendersonmusic
ComradeF- / comradef ,
HASHTAGS:

[@professordogwood8985]

JJ, excellent content! I always wondered why governance such as regional government, strata corporations, school boards or in this case, corporate governance is not covered in Political Science programs. I have never taken a business class but I foresee a new realm of academic foray with a course such as "Corporate Civics". Being that money truly matters in our world, something like this would be valuable to everyone, much like how you taught civics to new Canadians who were studying for their citizenship tests.

[@jhonklan3794]

Dem socs forget 1 important thing: Corperations, unlike governments, are voluntary agreements with no coercion or force. If a company has a drug policy, only those that work for the corporation have to follow it. Democratic control of corporations only make sense when their actions affect the rest of society.

[@chadrussell9309]

Corporate Governance and Control was my favourite University course. I agree that this is an extremely interesting topic

[@professordogwood8985]

@@chadrussell9309 I must ask you, what program did you take that course in? Or perhaps, which faculty taught it? Political Science? Business? Economics?

[@duffeemaddox6557]

More on this topic, please.

[@sempersuffragium9951]

JJ should do a video on every one of those: regional governmet, school boards, strata corporations, the lot.

[@benjaminmajeski140]

I need more of this, it’s fascinating. Sometimes we forget that corporations are run like governments.

[@im_not_political2026]

I think the reason we forget isn’t so much out of willful ignorance and more so the fact that for-profit corporations generally work differently than governments in several ways. A company (in a liberal free market at least) doesn’t force you to pay for its goods or subscriptions (and in some cases you don’t have to ever pay into whole industries of goods you don’t need or want). You also might have a strict immigration policy, but unlike in a state - it’s generally easy to emigrate from. Just two examples off the top of my head.

[@gollossalkitty]

We also forget that corporations run many governments.

[@swishfish8858]

Dude, corporations _run_ our governments. It's no surprise that a world-famous real estate mogul ran the US for a term, he was essentially doing so already.

[@reed6514]

Non-profits can be too, with a board, ceo, at-large members who vote in elections, etc.

[@AholeAtheist]

Nope. In most governments every adult gets to vote, corporations are just bourgeois dictatorships.

[@JHZech]

Probably one of the most out there political systems of corporations is Korean jebols and Japanese zaibatsus. They are often technically public companies, but there's circular stock ownership of various subsidiaries, and a big family that is functionally an aristocratic clan controls the important shares, and the politics are often family politics of who will inherit the "throne".

[@taylorphillips7030]

The Korean Jebols are very very interesting seeing as a handful of mega corporations truly dominate South Korea's economy in a way that is unlike any other country. Samsung, for example, has a larger share of it's home country's GDP than any other company in any other developed nation at about 25%. For reference, the largest company in the world, Walmart, contributes only 2% of the US's GDP. Corporate politics in South Korea are extremely important to the nation's government politics.

[@fuzzyhair321]

​@@taylorphillips7030what's hilarious though none of them hold military power. One of the only good things about nationalism. The government can just get rid of them

[@taylorphillips7030]

@fuzzyhair321 Can they, though? Can the government just get rid of them? That assumes a government that is wholly uncorrupt and that has a blank cheque from the public. The power of the richest of the rich and the companies they own is beyond what the police or military can control. South Korea has a corruption issue, and that issue stems primarily from the power given to and earned by it's largest corporations. No South Korean politician of any significant standing can hold office without the blessing of the Jebols. The entire economy is reliant on a handful of companies, if they collapse, the country collapses, and with it the military.

[@sdrawkcabUK]

It’s interesting how this system would be a recipe for corruption in most countries (as elements of it are in my own country of the UK), but works quite well in more homogenous and collectivist mentality countries like japan and Korea.

[@JHZech]

@@sdrawkcabUK It IS a recipe for corruption. Every Korean president except the most recent 2 had gone to prison for corruption. The third to last was so bad she triggered huge protests that ended in her being impeached. The head honchos of the jebols go to prison for bribes and then bribe their way into pardons.

[@DCAdamB]

In college, I took a class on the history of corporations. I was surprised to learn that many of the core components of American democracy can trace its origins to essentially corporate governance practices under the British Crown. The American Colonies (which later became states) were originally chartered as crown corporations, which helped define their rules and organizational structure. For instance, the bicameral legislature that 49 of the 50 states utilized was originally a corporate mechanism to ensure shareholders in both the old and new world could provide input for their company. And the requirement to have an annual “state of the union” is an outgrowth of the annual shareholder meetings that were required. The principles of “One Person, One Vote” and enumerated rights in a written constitution can also trace their origins to the corporate past of American states. It would be like a couple dozen Fortune 500 companies established communities on Mars, with the governance structure defined by their existence as corporate bodies. Then after decades or years, the residents of these communities decided that they had more in common with each other than their earth-based corporate sponsors (or even the governments that those companies are subject to) and decided to form a union, with their governance structure grandfathered in to the new system

[@JJMcCullough]

That’s big if true

[@Aman123ace]

That would be particularly interesting, though i'd like to fact check.

[@DCAdamB]

@@Aman123ace It isn’t a defined “fact” - rather a historical interpretation that (IMO) seems pretty supported by the primary sources available to historians. The text I read in that class which made this argument is called “CORPORATIONS: a study of the origin and development of great business combinations and their relation to the authority of the state” by John P Davis - its a pretty old book (in the public domain) so you can find it online for free if interested. The main argument about colonial corporations is located in Chapter 6

[@Aman123ace]

@@DCAdamB sweet im studying to be a librarian so you know i love a cited source

[@9erik1]

This is great, thanks for the source!@@DCAdamB

[@3seven5seven1nine9]

Incredible how jj knows exactly who his audience is

[@FredoRockwell]

I gotta admit - I neer thought about this much before! I noticed that the most democratic company you reviewed, McDonald's, is also the oldest. I suspect this isn't a coincidence. The other three corporations you mention have founders who are still alive, and in the case of Nike and Meta, well known founders with forceful personalities. I suspect McDonald's was once also very-undemocratic, back in the day when Ray Crock was running the show. Perhaps big public corporations can only become more democratic when the original generation of founders has passed on.

[@Croz89]

It's also the most decentralised, running on a franchise model. I wonder what percentage of McDonald's stockholders are franchisees. Probably not that many in the US, or they would have changed the ice cream machine supplier long ago!

[@benmaiorella6296]

if you really want a democratic company, go look at a company like Ocean Spray, a cranberry company in the Northeast US. They're an agricultural cooperative made up of a bunch of smaller farms where the farmers vote on who their CEO is and on certain corporate decisions. Thus you have people who actually work at the business making decisions rather than a collection of wealthy groups, which has made them the largest cranberry company in the Northeast US! it also means that the profits made by the company goes to the farmers, rather than into inflating stock prices with stock buybacks to make stockholders happier

[@AholeAtheist]

They can only become more democratic by either becoming worker owned co-ops, like Mondragon, or having governmental requirements for a certain percentage of union members on the board, such as in Germany. The former being more democratic than the latter, of course.

[@AholeAtheist]

@@Croz89 LOL. That's laughable.

[@pascalausensi9592]

​@@AholeAtheistInterestingly, worker co-ops tend to become more undemocratic as time goes on. In simple terms: if every worker has a vote, then every existing worker has an incentive to limit the entry of new workers into the system as that would diminish their own power. This dynamic then often creates a two-tier system, where older workers disenfranchise newer ones and power is concentrated in fewer and fewer hands as time goes on until the system reaches some sort of equilibrium: a relatively small cadre of workers that are legally part of the company, while the majority of workers are exluded in one way or another, for example through subcontracting.

[@StephanieJeanne]

I loved the animated board members, and the old-time piano music peppered throughout.😄 I definitely think the internal politics of corporations should be more thoroughly covered by news media. For the 30% of public shareholders who buy stock and then have voting rights for board members it would give us a better idea of who we may be voting for and what their roles allow them to do within that corporation....Zuckerberg 🙄 Thanks so much, J.J.!😉

[@Tetrapharma]

Those things are of very niche interest and are covered by things like specialized industry newspapers.

[@sempersuffragium9951]

@@Tetrapharma Well they shouldn't be. The basics of it should be high school education.

[@sempersuffragium9951]

@@AcornScorn Yes. Because it's not their business

[@terig8974]

But people can choose whether or not they want to participate in buying the products or services offered by these corporations. The more information people have as consumers, the better.

[@hugograssisoares1217]

In Brazil corporate governance is still predominantly family-controlled, even for larger companies listed at the stock exchange. There is a certain degree of reassurance for investors that decision makers have the company’s long-term interest at heart, as opposed to market execs eyeing their yearly bonus more than anything. That said family control has often stood on the way of broader efforts to modernize corporate governance like institutionalizing compliance and ESG. Family control over businesses also reflects a society structurally defined by sharp economic inequality with oligopolistic tendencies. This contrasts with the diffuse control seen in US “full corporations”, whereby the middle class gets to access the stock market even if indirectly via pension funds - Brazil largely lacks a robust middle class.

[@kaiserteddie9564]

nunca tinha pensado nisso mas apesar de que eu ouço que essa estrutura é abandonada depois da segunda geração

[@codymills2393]

JJ is ripping it with these new animations 😂 Never would I have expected to see laser beam Zuckercrab in one of his videos 😂

[@sgr2828]

I worked in the Walgreens finance department for a few years shortly after they merged with Alliance Boots. I believe Walgreens had a much bigger market capitalization than Alliance Boots going into the merger, however it seemed that the Alliance Boots ownership was much more concentrated and in lock step with each other, and voted together in a much more disciplined way, and the result was that the entire company was run by Alliance Boots executives post-merger, while many prior Walgreens executives were forced out of the company.

[@GalacticalHistorian]

As a current Economics student in the US, this is the most relevant video I’ve ever watched before. My class is literally going over types of governments and corporations right now.

[@fh2135]

Finally! I’ve been wanting someone to make a video on this for so long! As a political science major, I was so annoyed that we learned nothing about how governance works in the private sector.

[@martinalther6661]

I’m currently reading The Smartest Guys In The Room, which is about the rise and fall of Enron. I think the vast disconnect between how the media perceived the company’s corporate structure and how their corporate structure ACTUALLY was is itself a good argument for why the media should pay more attention to corporate politics.

[@TheBrunohusker]

What’s funny is before they moved to Houston, Enron was based in Omaha near where I grew up and they left in the 80s mostly due to iirc the influence of Ken Lay who was their CEO when they left. Speaking of which, I’m surprised JJ didn’t talk about how companies can have hostile takeovers where an investor or investors buy a majority of shares in a company to acquire it or change it. In Nebraska this happened with the Conagra corporation which makes a number of processed foods like Peter Pan Peanut Butter and Orville Reddenbacher popcorn. They were taken over and headquarters moved from Omaha to Chicago. Same thing happened with sporting goods retailer with Cabelas which was taken over and sold to rival Bass Pro Shops based out of Springfield MO. Sadly this devastated the small town of Sidney in the Nebraska panhandle where it was founded and stayed until the past decade.

[@ChessedGamon]

If you add up all the McDonalds across the world and treat the plots of land they're on as their collective territory, how large of a country would they be by land area?

[@JJMcCullough]

That’s a good question. I feel like I’ve heard people refer to them as one of the largest private land holders… if you include like the various farms and things that they own as well

[@Dan-is2qk]

Im really high so don't take my word as gospel. But according to Google when you Google "average size of a McDonald's worldwide", yahoo finance gives you about 4000ft². If you times that by 40275 which is how many Mcdonald's Google reckons there Were as of 2022 you get 161100000ft² which is about 14967km². Which is about the size of Timor-Leste in Asia. So yh we could have 1 big McDonald's as a country but that wouldn't be very convenient because everytime you wanted a McDonald's you would have to fly there

[@MidwestArtMan]

​@Dan-is2qk You are high, bro. You got the decimal mixed up with a comma. All of the McDonald's is about 14 Sq km, which is like 2 Gibraltars or 2/3 of a Nauru. Timor-Leste is 14,000 Sq km.

[@DCAdamB]

@@JJMcCullough McDonald’s owns approximately 42,000 acres. Here is a breakdown of notable landowners in the US: National Park Service - 79 million acres Department of Defense - 11.4 million acres Ted Turner - 2 million acres LDS Chuch - 1 million acres University of California system - 790,000 acres McDonalds - 42,000 acres Disney - 31,000 acres US Postal Service - 20,000 acres

[@GeorgeVCohea]

​@@JJMcCullough I don't believe so. Weyerhaeuser is the largest _private_ landowner in North America, where McDonalds owns and operates most of its farms. McDonalds doesn't even crack the top 10. This likely doesn't account for McDonalds owning the land that the vast majority of its locations are on. Corporate does this to both make more money and put more pressure and have deeper control of franchisees. A franchisee can't simply revolt and put up a new sign and start operating under a new name as a result.

[@cormaccorr]

Hi JJ, thought you might find this interesting… thanks to the democratic structure of Irish Credit Unions I am actually one of if not the youngest Director of a financial institution in Europe. Two years ago, At 20 I was nominated & subsequently elected to the board of my local credit union. Directors are elected each year at an AGM - every member is a shareholder & entitled to one vote - regardless of how much they have saved! If you are interested in hearing more just give me a shout

[@TurtleShroom3]

That's how my father's rural credit union works, too. He was elected CEO after serving as the credit union's loan officer for decades. Every member (defined as a person with any amount of money deposited) has one vote, and anyone with a vote could serve on the board. American credit unions must be non-profit, must reinvest any excess revenue not going into upkeep goes back into the bank itself. This allows them to charge significantly less in interest.

[@lilioconnor139]

omg i think this might be the best explanation of what 'stocks' are and what a 'shareholder' is. usually when people try to explain this stuff to me it just goes right over my head. thanks jj!! :)

[@jonrolfson1686]

You have done a good deed in demonstrating that much derided and feared corporations are not simply utterly unfathomable black boxes made of a compressed amalgam of evil and avarice.

[@catman6089]

absolutely loving this new style of animation. it fits your unique storytelling and education style perfectly!

[@jalenbrown1363]

As a social corporatist, this is so amazing to see. I thought I was the only one interested in corporate structures. 💀

[@user-xz4du3es5p]

Corporatism still maintains a distinction between labor & capital that can be dismantled with the heavy fostering of worker-cooperatives.

[@ashwathdamle7338]

Loved this video. JJ has this uncanny ability to answer questions I have bouncing around in some corner of my brain

[@ameliaarrows2790]

As someone who basically funded their own university club organization , this type of politics is VERY familiar to me 😅. While club is nothing like a corporation, we also have to adhere to the university club democratic bylaws system as well as have the right to create additional rules. As a founder, having to create brand new bylaws regarding who is allowed to be a member, who’s allowed to vote on particular issues, who’s allowed to run for executive positions etc where very stressful. When I started the club the structure was basically a very democratic committee structure. In the sense that all executives including presidents had the same level of power. We had majority vote system. HOWEVER: as we started the second year, let’s just say that I ended up being a tad bit more authoritarian. Simply because it was the easiest way to get things done 😅 I restructured the club to have a hierarchy head executives and regular executives and junior executives. Even though there was still a majority vote, i as president had a lot of veto power, of which i definitely took advantage of especially during election. Instead of having our members vote on who was the new president, I decided to host presidential applications separately and essentially with the help of two other founders allowed to decide who were the new head executives. I did this because 1: it was supposed to be more fair. I didn’t want applicants to feel like that their lack of experience would bar them from applying. Rather I created a criteria of experience , vision and commitment. 2: this was the first time a new president would be elected, and I wanted to make sure my successor would keep the club alive after I left. Basically I wanted another me 😂 but also someone who could take the club in interesting directions. Personally I hated how much power I had . But considering I founded the club I was so scared of loosing it, it was like my baby I’m so glad I’m no longer president because this type of politics is extremely suffocating.

[@davidfadul6239]

This was an incredible video, I hope you do a part 2! Maybe explore interesting/notable corporate elections from the past, and investigate corporate raiders?

[@krgoodrich1]

Great animations! Definitely a good topic that most of us don’t know that much about. Thanks for doing the research and making this overview!

[@yg6484]

It’s always great to see a new JJ video on a Sunday!

[@asher1kenobi]

Hey JJ, I was thinking about your jargon episode and I believe you already have one that while may’ve already been established, made them more common place. That term is cultural literacy. I use this term in conversation after learning it from you. That video where you listed off the 10 topics that people are not familiar with: 1984, The Office, etc. is what got me really into your channel. That doesn’t takeaway anything from your video, I just wanted to share that this video wasn’t the first to introduce a new concept (at least to me).

[@ToyInsanity]

Eric Donal Hirsch Jr coined the term in 1983.

[@TracyII77]

Those institutions which own the lion's share of the stock in the large corporations in the US are the managers of 401k's, pension funds, and other retirement plans. This is why most large companies can have access to so much cash to give such large compensation packages to their board members while still having so little accountability. Most retirement plans require that you defer your voting rights to the manager of those plans, the financial institutions, or state that your savings are with the financial institution who just so happens to invest it in stocks and bonds. This was one of the main reasons the Enron scandal was able to occur. US law defines where 401k's and many other retirement plans can be invested. This has funneled huge sums of money to a select group of institutions to a select group of corporations. So long as these retirement plans keep receiving more money from these financial institutions, large corporations can profit off that income without profiting off their regular business.

[@tomhalla426]

What one has to try to avoid is Pournelle’s Iron Law of Bureaucracy, where those skilled at the internal politics of the organization end up running it, to the detriment of the purported purpose of the organization. General Motors, pre 2008, or many labor unions are examples of Pournelle’s Law in action.

[@uydagcusdgfughfgsfggsifg753]

Please, make more videos on the political structures of corporations! This was really interesting, would love to dive deeper

[@manipulatortrash]

This definitely is a topic that needed some coverage in these times where people tall about said corporations a lot. You can't regulate and criticize what you don't understand after all!

[@EricaCalman]

A massively under-discussed topic, bravo. Would also be curious about Apple, since they're both so huge and formed over a history of wildly varying conditions including almost going under a couple of times.

[@treyshaffer]

Apple doesn't offer any preferred stock, and from what I understand, it has become a conventional company much more akin to McDonald's in JJ's example than other newer tech companies. None of the board of directors own all that significant of a proportion of the company's stock -- Tim Cook only has 0.02%. Most of the early investors / founders (eg. Jobs and Wozniak) sold a lot of their stock in the mid-1980s (when the company was at an all-time low ironically), such that by the time Steve Jobs died his stock ownership had decreased from 14% at IPO to 0.6% at his death. Wozniak owned 7% of Apple at IPO, but his net-worth is now 'only' ~$100 million, which means he lost out on a HUGE amount of Apple's growth, as 7% of a $3 trillion company is $210 billion today, meaning if he hadn't sold any of his shares he would currently be among the top 3 richest men in the world depending on which way the wind is blowing.

[@yellowedbasalt4901]

can’t wait to watch this; you know it’s gonna be good if it’s a JJ video edit: it was!! I am so grateful to have learned about this topic, since it is something I have no background in yet is so important in our world. Thanks, JJ!

[@ms-vq1os]

That Zuckerberg scene was wild

[@Player4Yellow]

I remember one day where I was playing around with a fictional world I've got in my head and using political terms to label the leadership structure of four characters who live together. Like, would they be an "anarchist" household and completely forget about designating someone to be the primary guide for paying bills, mowing the lawn, etc.? Thinking of it in that way was amusing to me. Also, J.J., here's a video idea. I'm a fan of the My Little Pony franchise (a.k.a. a "brony"), and watching videos from you where you analyze things that we mostly take for granted has gotten me thinking as well. I look at these magical, rainbow-colored creatures and think "Hmm, what's the history of why cartoon ponies are depicted like this in the first place?" Also, how did our culture get to the point where the brony fandom could exist? I think that has potential for a video, if it's something you're interested in

[@f_f_f_8142]

Besides various forms of employee involvement (from the German Betriebsräte system to worker co-ops) you could also cover the strange companies that own themselves where there are no shareholders and all the profits are just reinvested.

[@HeisenbergFam]

Cant wait to see completely friendly comment section on this topic

[@canuckguy0313]

What might’ve been a good addition is comparing the corporations politics to real world countries explaining why (like “Netflix was like France in that they had an ineffective PM where the real power was with the president (Netflix ceo)”, or “Meta is like North Korea in that the chairman/ceo can overrule anything”)

[@user-be7pw3sm7d]

Another interesting layer is just how radically different corporations are organized from country to country (like Japan and Germany for example).

[@vacatiolibertas]

Great video and topic! I hope it gets the large audience it deserves! One channel I would definitely recommend if one is interested in this sort of content, that being the "politics" of corporate governance, is Modern MBA. The channel has a wealth of videos discussing various specific case studies regarding policy and corporate governance. Two videos I would specifically recommend are "The Invincible Business of Diners," which discusses the governing dynamics of three American dining chains with three very different governing styles, and "The Rise and Fall of Under Armour," which discusses silicon valley and the unique dynamic of Founder-led companies.

[@shadow6543]

This is true, I work in the legal field. The articles of incorporation is basically a corporate constitution a long with By-Laws and Unanimous Shareholders Agreements. I’ve gone through about a million corporate minute books. Corporate Law is super fun especially if you’re a history nerd.

[@jacobjj1078]

JJ, I loved this video! I studied economics and one of the things that occasionally and rarely came up were incentives in political systems. Seeing all of the different models makes me so happy because we can see the benefits and drawbacks of different models. I will say that I didn't enjoy that you didn't touch up on the monarchy of musk too much. I personally love it; he makes a decision, it either works or bites him in the butt and then he adjusts until things improve and works for everyone. It is pretty fun to see in real time! Regardless, I enjoyed the video. God bless!!!

[@kencrews5536]

That skirted the edge of being boring but at the same time had me watching until the end and ultimately glad that I did.

[@TheKraken5360]

I think its really interesting to compare systems of government to figure out which systems work best. When thinking about this, its helpful to remember that we have tons of little governments in the form of publicly traded companies.

[@benmeaders769]

This was really interesting and I knew literally nothing about any of this. Thanks JJ!!

[@w5527]

That Meta VR-headset-laser-killing joke-thing was so unexpected 😂 Love the video!

[@Lawfair]

I just started the video, and I want you to know that yours is the only video, I am watching today that I am not watching on double speed.

[@jordyboy62]

One company that i've heard some intersting things about their corporate structure is Valve but they're also a private company and very secretive about their inner workings. Supposedly they have a company wide rule where you cannot do anything that creates work for another employee.

[@kaazmire5358]

I would like if you talked about the politics of cooperatives next. Talking about how co ops like REI works or more explicitly worker cooperatives.

[@alexandercolefield9523]

You should mention cooperatives, where the actual workers of a company have say in corporate decisions.

[@fraslex]

Thanks for this video. You might want to do a similar video on university governance in North America.

[@MilanTheG]

More please. If you want a corporate drama story, Volkswagen with Diess, the failed ev internal push, and the Piech families.

[@serbkebab2763]

Remember, it was the East India Company (from the UK) that colonized India, not the UK government. The East India Company had its own army, twice the size of the British army at the time. Corporations are powerful.

[@avacurtis2729]

I actually sort of have experience with this. I currenly am serving a 3 year term on Sierra Club of Utahs Executive Commitee. Its basically a shareholder board but for nonprofits. Board Members are elected via an email to all club members (but responce is incredibly low) and serve a term. The catch is we are all volunteer for the club on various comittees. It works like this for all Sierra Club chapters even national. Each member gets one vote. Its incredibly simple. We manage finances, decisions, commitee oversight, and even work with national on things like hiring of staff and negotiating pay rates

[@subparnaturedocumentary]

thank you for insight into something i honestly dont think much about but maybe should really have a little look into.

[@danielguevin5732]

This was a really great video. I knew almost nothing about this topic.

[@Bogfrog1]

I took a break from studying for my SIE exam only to watch a video about the same stuff I was just studying. Wow

[@sempersuffragium9951]

Totally worth it though

[@Bogfrog1]

@@sempersuffragium9951 yeah

[@clarkefoster9386]

I think it's worth pointing out especially as we're seeing the UAW go on strike against three major corporations and actors and writers that we examine questions of corporate accountability beyond stockholders. The governing systems of these companies only let the people invest their money make decisions, not those who invest their labor. Both groups are risking loss of financial stability and inability to pay on other invests made with the assumption of them recieving funds from these corporations. Just as companies can't function without funds from investors they can't function without labor. When comparing these systems to traditional governmental political systems aside from the lack of one person, one vote, the decisioj of who to allow political participation must be critically examined. Also unions themselves have internal political systems which are not well understood by many people, and the current UAW head is associated with creating a system of one member, one vote.

[@sempersuffragium9951]

SUCH. GREAT. 'TENT. (content). But seriously, I love this type of video, well done JJ!!!

[@ZBott]

I wonder if the weird disconnect a lot of rich people have about voting is they expect shareholders democracy when they have republican or democratic interactions. Civics courses would help if that's the case.

[@Hand-in-Shot_Productions]

Before this video, I knew very little about how corporations are governed, so I found this quite informative! In short, corporations, like governments, can either be democratic (like McDonald's) or authoritarian (like Zuckerberg's billions of votes in Meta). Also, speaking of Zuckerberg, I found your animations of him and his VR set quite entertaining! I laughed at the animation from 15:23 to 15:40! Thanks for making this!

[@Maxime_K-G]

Interesting! I thought you were also going to talk about how McDonalds uses franchise agreements so their restaurant managers have more freedom in their operations and operate independently in some ways. But just the highest forms of corporate government is something we seldomly hear anything about. I always thought it was just to complex or rigged to make any sense but clearly some of these systems can have great influence over how a company is run onto themselves as well when they're democratic.

[@PsRohrbaugh]

3:40 I am SO glad you mentioned the counterexample of Facebook to the "1 share, 1 vote" rule. Many people I tell about Facebook's system simply don't believe it, thinking that 1 vote per share is some sort of law. Frankly, I think it should be. (by "Many People", I mean older casual investors like my parents). When I learned about investing in the 90s, I was told that "preferred stock" meant you got repaid first in the event of a bankruptcy, but didn't get dividends. That made sense to me. Having 10x as much voting power is just open corruption. Also, I wish you explained that companies don't directly benefit from their stock share price (unless the company owns some of it's public shares). The company only receives cash directly when it "goes public", and everything after that is investors passing money back and forth between each other. The stock's "price" is simply the value of the most recent transaction, and you have to get into things like bid - ask spread and trading volume to get a deeper understanding of a stock's value.

[@visvivalaw]

I can't find the clip but in Robocop 2 when OCP announces they're taking Detroit "private", the CEO is asked by a reporter, "What about democracy?". He responds that a share of OCP costs less than a new TV so most people are able to vote in corporate affairs.

[@elustran]

Part of what's most interesting is the layers of power and how they concentrate. For example, a normal person may own shares in a retirement or investment fund held by a brokerage that then invests in a variety of stocks. So, the brokerage is able to consolidate the reigns of power via their assets under management. Financial power thus becomes highly concentrated outside the hands of regular people because of our culture of private funds.

[@dersitzpinkler2027]

Hahahah the zuck crab was a side of JJ I haven’t seen before. That was hilarious

[@timelaps3d361]

Another award-winning video 🏆

[@ArthurCSchaperMR]

Please do a video comparing the different parliamentary or congressional systems in different countries. That would be really interesting!

[@1ronDragon]

The animated sections are cool, they feel a LOT like internet historian clips in both character design and general zaniness 😂

[@treyshaffer]

This is something I have thought about so many times, yet I've never seen discussed anywhere else, so I'm beyond excited you did a video on this. I've always felt there is a deep irony to how we (Americans) call ourselves "the most free people on earth" or whatever, when most of our time is spent in environment defined by working for corporations that are essentially dictatorships/oligarchies with absolute control over our working lives.

[@Croz89]

Eh, turns out the alternative is having the government do that job instead, ostensibly "for the people" but usually just for themselves.

[@treyshaffer]

@@Croz89 Why is there only one alternative? When you get down to it, it's a sliding scale right. You're hinting at a Soviet system being the only alternative, when a Scandinavian model also exists, but doesn't give as much power to mega-corps.

[@Croz89]

@@treyshaffer The Scandinavian model gives more power to the government. This requires a high trust society that trusts said government to act in its best interests. This is pretty rare.

[@weirdlanguageguy]

Very fascinating! I think a similar video about the governing systems of various religious groups would be interesting as well

[@immanuelessien14]

10:35 never thought i would hear that sentence in my life

[@Ben-kv7wr]

As someone involved heavily with my workplace’s union I’ve always said these companies act like and organize themselves like governments

[@cybospy]

JJ, excellent content as always! along with this would love to see recent development that is happening with Trudeau and India as well as chances of Pierre in this election

[@DOINEIGHT]

Thank you JJ for talking about the (probably intentional) obscure realm of "corpolitic!?!" Lest we forget that the big (and much smaller mom 'n' pop) corporations which have the most immediate influence on people's life. I'm looking forward to more corpolitical contents in the future.

[@jacobandrews2663]

Great in-a-nutshell explanation. Could you maybe do a similar video for the ins and outs of Co-ops

[@treyshaffer]

Something very important to note about the institutional investors is that they are basically just a pass-through for public ownership via indices / ETFs. There's loads of people who have gotten all conspiratorial about Vanguard and BlackRock because they look at these ownership charts but they don't realize that it's not like that have all that active of a say in these corporate governance structures (generally)

[@JJMcCullough]

Yeah that’s true. I wish I found a way to mention that. If I get a mutual fund from Charles Schwab, I can still assert my rights as a shareholder over any stock that mutual fund contains. Most people never do, and the mural fund companies use the voting power their customers give them. But it can be a blurry situation regarding who we should be counting as the owner of that stock.

[@TUN3RCOM]

This is an excellent topic that to your point is under explored. Quite fertile ground actually.

[@TheBrunohusker]

So I looked at a few American sports teams and only one has shareholders and a board and that is the Green Bay Packers of the nfl. However all nfl teams have a general manager who takes care of personnel decisions though some owners like Jerry Jones of the Dallas Cowboys, are also the manager. It seems thiugh that usually the roles of owner and general manager are separate but sometimes the owners get very involved like Jones or Mark Cuban of the NBA’s Dallas Mavericks, or in the past George Steinbrenner of baseballs New York Yankees.

[@Descriptor413]

You should check out the Mondragon Corporation. It's basically a federation of about 200 worker owned cooperatives managed by their own central bank and whom share access to internal institutions such as a research institute, unemployment office, and even their own accredited university. And, of course, each of those 200+ cooperatives have an internal structure comprised of a board elected by the worker-owners, a worker's council, and a CEO appointed by the board. It's pretty wild.

[@trevorstewart1308]

you always get a chuckle outta me. Thank you

[@supercolinblow]

I always thought that the title of company "president" was an anachronism, since the CEO is the real power in every corporation; but I guess I was wrong about that, vis a vis Nike. Great video as always JJ.

[@hughoriordain372]

You should do a video like this on the governance of colleges and universities and their student governments

[@crypticcorgi8280]

Considering how much cooperations affect our culture. It is interesting to see what all goes on, on their side.

[@quokka_yt]

I love the Zuckerberg crab animation 🦎🦀🔥🔥🔥

[@7000EastAve]

All your videos are interesting, but this one was particularly interesting -- especially as some people believe corporations are better run than governments...

[@zaneharding4208]

Goated thumbnail, J.J.

[@rifleman4005]

Those institutional investors are usually large pension plans. Specifically public service pensions plans. In Canada the Ontario teachers pension plan has more assets than all the Canadian billionaires put together. At the end of 2022 the top 100 pension plan in Canada have about $1.8 trillion in assets not counting Cpp and Qpp. They dwarf everyone else.

[@georgedoty-williams2085]

JJ having a lot of fun with animations

[@paulmelde919]

I would love to know more about how corporations make decisions. My personal experience in this area is one of frustration, however. Corporations tend to communicate using “corporate speak”, which is highly filtered and political in nature. It always leaves me very feeling very unsatisfied. Come to think of it, a video on “corporate speak” would be a great follow up to this video.

[@michaelwells529]

I do not, in fact, know the difference between the French and Australian political systems, I clicked because I love your videos!

[@sleepysakamoto]

You should upload the Meta shareholders meeting animation at least as a short, it was really fun xD

[@kduarte6136]

A few years ago, I took classes on corporate law in Brazil and don't remember much. Based on this video, I'd say our corporate structures are pretty similar and I suspect that's the standard worldwide: - The idea of classes of stock and preferred stocks is basically the same. Many investors don't really care about internal affairs of the firm and only own stock to sell it later. Preferred stocks usually grant priviledges like priority on receiving money in case of bankrupcy, so they usually are worth more; - One big difference is the chairman-CEO relation. From what I remember, companies listed on the stock exchange in Brazil must have a chairman of the board AND a CEO, so it is not optional to have everything concentrared on one person like in some of those companies; - Here I believe board members serve 3-year-terms, though I could be mistaken. The boards are usually smaller, having at most 5 to 7 members, some have only 3. That being said, other business in Brasil, such as "limited societies" (I think you'd call them LLCs) can be really big, some bigger than Incorporated companies, and they are usually controlled by small familes and don't have to obey to most of those rules.

[@Croz89]

Private LLC's are common in just about all countries, in fact I'd say they are the vast majority of corporations, only the biggest tend to go public and even then many giant corporations are still privately owned. Your typical small to medium size local business isn't selling shares on a public exchange, that's usually too much hassle and not worth the cost. Generally the company will be owned all by one person or split up among a small number of people, and in some cases employees will own privately issued shares, either as part of a cooperative arrangement or as part of a severance or retirement benefit.

[@kduarte6136]

​@@Croz89Yes, I am aware of most of that. The thing in Brazil is that even many of the largest companies are LLC, preferring not to go public or become a Inc., so they won't have to submit to stricter regulations.

[@kduarte6136]

Also, in a Brazilian LLC, you can even sell is shares, like if it was a Inc. that didn't go public, and, depending on their profits, it also allow for them to benefit from small bussiness law priviledges that Incorporated companies can't.

[@Croz89]

@@kduarte6136 That's not unusual even in the US. It's certainly true in Europe, there are a lot of large privately owned corporations. Going public has it's advantages and disadvantages, yes you have less control (though not that much less if you keep a controlling stake) and more legal oversight, but it's much much easier to get investment capital. And yes, it is perfectly possible to privately issue shares in a privately owned company. It's a convenient way to divide up ownership and you can even give them to your current or former employees if you want.

[@kduarte6136]

​@@Croz89 That's curious. I suppose our corporate governance differences are mostly due to culture than due to regulations (or it isn't that different after all). Thank you for the info!

[@sameaston9587]

Ive learned so much bout business politics as a teenager during the Disney's Michael Eisner hoowaah. That would be an interesting future viedo.

[@ravenlord4]

Oh boy -- J.J. will be busy this week. Things just got real. And real fast.

[@mrplatink]

His hair keeps getting more and more GORGEOUS

[@vitaminluke5597]

It would be really cool if there was a corporate political system where employees had democratic control of their workplace. Things like hiring and firing their managers, sharing profit directly, and deciding long term policies for how the company will run, to the benefit of the employees. Someone should try that.

[@JJMcCullough]

Why would that be good?

[@vitaminluke5597]

@@JJMcCullough Everybody who works within a corporate structure knows that management often makes and gets away with decisions that are irrational for the long term health of the company, bad for employees, and sometimes plenty of managers are hired through nepotism.

[@vitaminluke5597]

@@JJMcCullough Employees often work at a company longer than some CEO who cashes out after a few years of unsustainably pumping up stock prices. So employees, who work on the ground and know a lot about the day to day operation of the company, are well suited to voting on certain major decisions, while also electing competent managers to do the daily managing that a collective group of people doesn't have the time or skills for. After all, shareholders don't care about long term performance as much as employees do. The former can cash out any time and move onto another project, but employees build lives in their communities, so they value stable performance, and if allowed to vote also prioritize innovation to allow their paychecks to grow with profits.

[@realCyng]

@@JJMcCullough These people have nothing without us. Their wealth is a product of OUR labor. Why should we not have a say? Why should they be allowed to abuse us without consequence?

[@realCyng]

@@vitaminluke5597 So true, we speak often about how different it would be if the people in charge had ever even stepped foot in the workplace. It's painfully obvious these fat cats are just issuing decrees from the comfort of their corporate office, not even in the same state as us, making decisions that we all know make no sense.

[@mcmilkmcmilk9638]

It would be interesting to compare various corporations governance systems to there most closley like coubtry governance system

[@dingusfinance8931]

I like the Sally Cruikshank-esque sequence at 5:42

[@TurtleMarcus]

Now it's interesting when corporation and goverment intersect. For example, the Norwegian Government owns 66.70% of the stocks of Equinor, the national oil company. And the Government owns 54% of the stocks of Telenor, a telecommunications company. I wonder who the governance of these companies work, especially when the Government owns a minority share and not a majority (as with DNB Bank, where the Government owns 34%).

[@sempersuffragium9951]

It makes the EU very happy to interfere, because such an arrangement blurs the line between government intervention in the economy, and the government just managing it's property

[@burnbird16]

It would have been interesting to hear more about the Chambers of Commerce and how much sway corporations have on local policy. Still a very cool vid!

[@benjohnstone4680]

I enjoyed this might do a Lil bit of research on my own. It's so weird how nebulous these concepts we hear about every day are. I didn't know there were lame stocks and cool stocks and that rich overlords used cool stocks to hold down others. I didn't know that a board of directors was elected. I didn't know there were safeguards for keeping members of the board in.