Other commendations
On Tuesday the board of British chocolate manufacturer Cadbury recommended shareholders to accept the offer from US food giant Kraft – who need to borrow £7bn to pay for Cadburys. Chairman Roger Carr said the board did not feel guilty about selling Cadbury. “We don't own the company - the shareholders own the company and the board has a fiduciary duty [to recommend an offer] when appropriate value has been paid." Union leader Jennie Formby said the Cadbury workforce was shocked and angry at having been "sold out". She added: "This is a leveraged bid and Kraft will eventually have to repay the debt, meaning a great deal of uncertainty for the workforce in the UK and Ireland." Peter Cadbury, great-grandson of the company’s founder, stated, “I don’t think Kraft have made a very convincing case about whether they can run a business better. It’s being recommended purely on terms of price.”This highlights one of the glaring failures of corporate capitalism: the gulf between the interests of the shareholders who legally own the company (most of whom seek only short term returns on their capital) and those of all the stakeholders whose livelihoods depend directly or indirectly on the business – employees and their families, suppliers, local businesses and the wider civic community. The relational business approach seeks to reform shareholding by discouraging “absentee landlords”, increasing the involvement of shareholders in operations of the company, and aligning their interests more with the “front line” stakeholders.