A Domestic Perspective

Friday, January 1st, 1988 at 12:00 am by Roland M. Machold
Roland M. Machold, A Domestic Perspective, 1988 Colum. Bus. L. Rev. 751

Thus, increased accountability will be accompanied by a far broader agenda imposed by the government. Such a relationship may gravitate towards the economic systems prevalent in European companies and Japan, where government policy has a greater role in the direction and development of enterprises. This may or may not be appropriate for the U.S. economy. However, in either circumstance, I believe that the economic objectives of corporations will become more diffuse and ambiguous, and such a change will replace the discipline and focus of the marketplace, which is the cornerstone of our free enterprise system.

Author Information

The author is the Director of the Division of Investment for the state of New Jersey. He is also Co-Chair of the Council of Institutional Investors, which has proposed a Shareholder's Bill of Rights. As Director of the Division of Investment, he is responsible for investing $25 billion in assets from 109 state funds. Of this amount, $20 billion represents the holdings in trust of seven state-administered pension funds with 380,000 beneficiaries. These pension funds contain almost all of the life savings of the state's employees (whose average annual salary is approximately $19,800), and former employees (whose average annual pension payments are approximately $5,000). Over five percent of New Jersey's residents are thus beneficiaries of these pension funds.