Europe’s economic crisis

Touched down on American soil after our European vacation and am thankful for that for a number of reasons. The US certainly has its financial challenges, but Europe faces greater danger and is far less unified to be able to deal with it. Imagine if the actions of Congress had to be approved by the legislatures of EVERY state before any final action could be taken. That is what the European Union is facing in dealing with the crisis stemming from fiscal irresponsibility of member countries.

During the cruise portion of our trip, I befriended a law professor from Italy’s most esteemed university. He has a fascination and reverence for the American system that rewards innovation, entrepreneurship and competence, and is frustrated with the Italian system, which does not. Italy’s economy is still dominated by family-owned businesses aligned with the financial institutions such that access to capital through public ownership (ie issuance of stock) is all too rare. He had just completed reading The Steve Jobs Way by Jay Elliot and admired how our system enabled Jobs to excel, be questioned by the board at Apple, falter and then rise again to unparalleled success.

The American Board of Directors

American capitalism enables capital to flow to innovators and, in the interests of those investors, to be protected through governing boards. As we have talked about in a number of issues of our BoardGrowth™ Newsletter, boards face no small challenge in undertaking this responsibility. They must challenge and call to higher performance their CEO’s without being the source for stunting innovation or well-calculated risk-taking. In essence, it is the credibility of the board to protect investor interests that enables investment capital to flow into US companies. In the case of nonprofits, it is faith in governance that assures grantors or donors that their interests will be protected.

So in addition to a bit of R&R, the trip renewed my faith in the ability of our system to fuel the new ideas that will bring needed growth and prosperity to our nation. I would love to hear your thoughts on the topic by emailing us.