Posted: 08 Jun 2013 12:29 PM PDT
I would even go so far as to propose that prospective citizens be required to pay for the privilege to become Singaporean, in the same way one should have to pay for newly issued shares in a company.
Charles Tan Meah Yang, Today Online
Singapore has often been criticised as being run too much like an MNC: We are ruthlessly efficient, have an unhealthy focus on making money, and so on.
I am still not convinced that there is anything wrong with these attributes – our efficiency is a rare and valuable strength in a largely inefficient world, and I would posit that keeping a keen eye on the bottom line is crucial in ensuring we leave behind a legacy of unlimited opportunity, not debt, for our children.
This analogy has set me thinking, however. What if we tried something radical and really did run our country as we would a corporation?
There are some striking similarities between the two. Like citizens of a country, shareholders of a corporation get to vote; they elect a board of directors to act on their behalf (as we do our Members of Parliament), and C-level executives (like government Ministers) keep things running smoothly.
Like politicians, directors all have to be re-elected after a certain term and must therefore work to keep shareholders happy. The crucial difference, however, lies in the rights and responsibilities associated with being a "shareholder".
CREATE VALUE FOR SHAREHOLDERS
Unlike a corporation, every citizen is limited to one share and one vote, neither of which can be sold or traded because unlike normal commodities, they are inalienable. Nonetheless, citizenship and shareholding are sufficiently similar that we might benefit by taking a more "market-based" approach to certain political issues. This is because the rigour of the corporate system helps create value for shareholders of a company in the same way that it might help improve life for citizens of a country.
Take, for instance, dividend policy. Most companies aim to pay out a certain percentage of profits each year, after setting cash aside to maintain existing infrastructure, invest for the future and provision for unforeseen contingencies.
Some even try to maintain a certain level of dividend by accumulating reserves during the good years, and dipping into them during the bad. This is generally good practice because it instils a kind of discipline in senior management that tends not to exist when one has a cash buffer to comfortably absorb any losses arising from mistakes.
Companies that hoard too much cash tend to spend it unwisely: Making value-destructive acquisitions or indulging in lavish corporate perks. Japanese companies have been serial offenders when it comes to such issues.
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