alt Hacker News> The Board members are appointed by the Intel Corporate Governance & Nominating Committee, the chair of the committee is Barbara G. Novick, co-founder of BlackRock. The board is de-facto run by the trio of BlackRock, Vanguard and State Street, smaller investors follow their lead.
Thanks I learned something new today. Is Intel unique or is it common? Does Novick have this position due to pension funds specifically, or index funds in general? AIUI index funds own large stakes in many public companies so if this is true, they are all effectively run by Blackrock and Vanguard (or should be).
> You need actual talents, vision, execution to make things happen, not just interest. Pension funds have no vision beyond "stock go up", no strategy other than "more revenue, less costs".
As opposed to other investors? Outside of founder-owners you've described 99% of retail and institutional investors. Why do you believe pension funds specifically lack "talent"? As long as there is competitive pressure in every market, it doesn't matter. Some of them will be right and actually deliver better products, services, and profits.
> In fact a successful socialist state (if they ever existed) would be indistinguishable from a huge pension fund that swallowed the whole economy.
I've long believed that's the only way to make the welfare state numbers (in any country) work in the long run. Not the whole economy but like substantial proportions of the stock market. You can't tax labor to fund retirees when capital captures most of the returns and there are fewer and fewer workers. And you can't renege on promises already made to people who have been contributing throughout their careers. This can work: sovereign wealth funds are an example. Rising productivity is an updraft that pension funds should capture.
> Is Intel unique or is it common? Does Novick have this position due to pension funds specifically, or index funds in general?
I'm not a market guru, just happen to know about Intel because I worked there between 2009 and 2015 and it was sad for me personally to witness the downfall. The company started to rot around 2012, but the stock prices shot up and kept rising for 8 years. The strategy was "higher CPU price, less R&D, less people budget, no risky bets like mobile", this drove the earnings up to the pleasure of shareholders. You can't even call this strategy "shortsighted", it's "medium-sighted" because of the huge momentum that took years to dissipate, but the company's fate was sealed then. I don't know details of what happened to Boeing but suspect it was something similar.
> AIUI index funds own large stakes in many public companies so if this is true, they are all effectively run by Blackrock and Vanguard (or should be).
They almost never have the majority so control is determined by the presence of other figures which smaller investors could follow during the vote. A founder even with a partial control is often enough to steer it. When there's no one left but the funds they run the show.
> As opposed to other investors? Outside of founder-owners you've described 99% of retail and institutional investors.
Well first of all in this thread we are discussing precisely the question of how to redistribute the shares of the founder. OP says that the "policy" should have taken them away. "And who to give them?" I ask.
Second, I don't think 99% of investors (measured by volume of investment) have no strategy.
> Why do you believe pension funds specifically lack "talent"?
Because they're not backed by anyone in particular. Talent is always risky, systems that try to please millions of stakeholders are inherently risk-averse.
> I've long believed that's the only way to make the welfare state numbers (in any country) work in the long run.
I do realize many people think like that and that's why it's so scary for me. I don't believe this system could work.