Basically, many of these companies took decades to reach these positions where they're trusted. A bunch of managers rightfully figured out this was an asset that could be easily traded away for increased profits and they'd be gone by the time anyone noticed the devastation they left behind.
Which companies? The ones who had quality and lost it? There's not a lot of defense against being purchased on the open market, as happened with Boeing. Or Simmons is another good example: https://www.nytimes.com/2009/10/05/business/economy/05simmon...
The real problem here is the US's dominant business culture, which tends to value short-term cash extraction over long-term value creation. There are a lot of practical incentives for that, but the culture problem itself will have a lot of inertia, so I think we're going to have to look for a generational change.
Stockholders always want the company to survive, over short term profits. The problem is that stockholder interests are not the same as the custodian interests.
Custodians get paid on the basis of inmediate performance.
Thats the broken link.
Custodians are thus nominating board members that are incentivized by short term decision making. The nomination is based on relationships and based on trust.
And then you get in trouble.
If board members were elected as a sort of election by ultimate stockholders (which include actual employees, in fact) you would see a different board. Therefore different CEO.
It is a variation of the principal-agent problem [1].
It is extraordinarily hard to perfectly align the long term interests of shareholders and employees. It requires a level of oversight that most boards can't manage.
It's been slowly cannibalized and is barely running on Inertia left by the previous government. Took almost the same as Boeing, about 25years. We barely have electricity, and now we're unable to supply clean drinking water to vast amounts of the country, including the capital.
Depends on who you ask really, and what side of the aisle they're on.
Personally, I think at the core what started it, is the movement away from meritocracy. Other "things" took priority, and everyone on the ground was left trying to figure out how to not let the whole thing collapse whilst still servicing the new priorities given to them.
