“Just, Thriving, and Sustainable Communities”

The objectives of the “Heart of America” project are to eradicate the economic roots of poverty, war, and racism.  This can be done by promoting justice and democratization of ownership for every person through equal access to private property rights in productive capital. In the words of R. Buckminster Fuller, the goal is “[t]o make the world work for 100% of humanity in the shortest possible time, through spontaneous cooperation, without ecological offense or the disadvantage of anyone.”

A Few Thoughts on Mondragon

Last week we came across an article on the Mondragon Cooperatives in Spain.  And what are the Mondragon Cooperatives, you ask?  (People who are not familiar with them tend to get blank looks, even outrage, when they admit they never heard of them so we’ll spare you the humiliation if you don’t know.  And the sense of superiority if you do. . . .)

Discipline: Being Your Own Boss

Guest Blogger: William R. Mansfield, Founder, Mansfield Institute for Public Policy and Social Change, Inc.

Where are the great thinkers, creators, innovators and entrepreneurs?

Everyone must be his or her own boss! Real leaders are their own bosses. It is our responsibility to encourage and teach others to be their own boss. Real leaders develop free-thinking, innovation and value ownership for all. The result is high output, positive productivity and innovation. However the traditional American workplace does not promote ownership. Most bosses, managers and supervisors today would rather control their employees.

Activism vs. Leadership

Guest Blogger: William R. Mansfield, Founder, Mansfield Institute for Public Policy and Social Change, Inc.

In our postmodern world of rapid change and complexity, there are no final authorities. Given the greater “wisdom of crowds,” no single person can direct a complex business. A lone individual can only prod it to think differently.  The postmodern leader is an activist.

Just Third Way Home Economics, II: Optimal is Beautiful

Last Thursday we looked at the reason why Keynesian economics divides the science into “micro” and “macro”: to justify crazy stuff that no one with any common sense would accept if it wasn’t presented to him or her by people hiding their pointy heads behind Ph.D.s . . . which could easily stand for, “Pointy-headed Dunces.”

Just Third Way Home Economics, I: Micro v. Macro

Back in 1984 Father William Ferree, S.M., Ph.D., Dr. Norman Kurland, and a number of others came together in a cafeteria at the American University in Washington, DC, and organized the interfaith Center for Economic and Social Justice (CESJ).  From the first — possibly because of the cafeteria connection — CESJ events have almost always included food and drink.  There has even been talk of putting together a collection of recipes one day.

Justice-Based Management, II: Reforming Corporate Culture

[This posting was rescheduled from November 30.  Sorry.  The refugee crisis seemed more important, and then the whole panic over falling prices by people who think we need to pay more for less to be better off.] In the early twentieth century, Judge Peter S. Grosscup of the United States Seventh Circuit Court published a series of articles on what to do about the problem of rapidly concentrating ownership of the nation’s productive capacity.  With such titles as “Who Shall Own America?” and “How to Save the Corporation,” Judge Grosscup outlined a plan for expanded ownership of corporate equity that, while it relied on past savings and was therefore not universally applicable, at least attempted to address the increasing wealth and income gap that was a growing problem even a century ago.

Justice-Based Management, I: Is There a Role for the Corporation?

It’s common today among many individuals and groups to disparage “the corporation” (meaning business corporations) as inherently evil.  Corporations consistently make the “Top Ten List’ of the things people love to hate.  Other things on the list, of course, are “the rich” (considered non-persons and thus things without rights), “the government” (a social tool, and therefore a thing), “the banks” (including central banks, especially the Federal Reserve), anybody who ticks you off or disagrees with you (and who therefore loses all rights, becoming a thing), and so on.

Knute Rockne and Social Justice

Yesterday someone happened to remark that his son, currently in high school but slated by Dad to be the next president of the United States . . . in about twenty years when he turns 35, that is . . . wants instead to be a teacher and a coach.  No problem, because good teachers and good coaches have the same characteristics as good presidents, so a career change would be very easy.

"No One Can Breathe Against Their Will"

In 1955, Milovan Djilas published a devastating critique of the allegedly classless society established under communist rule in Eastern Europe. Titled, The New Class: An Analysis of the Communist System, Djilas recounted how, although communism claimed to have made everyone equal, all it had done was replace the bureaucrats of the old system with the even more powerful bureaucrats of the new system — the "New Class."

While The New Class was highly praised in the west, especially in the wake of the "Red Scare" of the 1950s, many people missed a secondary theme in the book — that while the Nomenklatura were definitely worse than what they replaced, the old system was hardly something to write home about. As Pope Pius XI described the situation in §§ 105-106 of his 1931 landmark encyclical, Quadragesimo Anno ("On the Restructuring of the Social Order"),

In the first place, it is obvious that not only is wealth concentrated in our times but an immense power and despotic economic dictatorship is consolidated in the hands of a few, who often are not owners but only the trustees and managing directors of invested funds which they administer according to their own arbitrary will and pleasure.

This dictatorship is being most forcibly exercised by those who, since they hold the money and completely control it, control credit also and rule the lending of money. Hence they regulate the flow, so to speak, of the life-blood whereby the entire economic system lives, and have so firmly in their grasp the soul, as it were, of economic life that no one can breathe against their will.

As we have said a number of times in the materials distributed by the Center for Economic and Social Justice ("CESJ"), virtually the only difference between socialism and capitalism for the propertyless worker or citizen is the name of whoever controls the wage packet. As one ancient Roman writer said, "When changing masters, the only thing that changes for the poor is a name."

What can be done about this situation? Dr. Yasser Nafei, author of Corporate Dictatorship: The Evil Behind the Collapse of the World's Economy (2009), sent us an extract from his book — just released this past August — briefly analyzing the situation and offering an intriguing solution to the problem of what amounts to favored slaves acting as overseers for their faceless corporate masters. Dr. Nafei's analysis is followed by comments from Dr. Norman G. Kurland, president of the Center for Economic and Social Justice.

What about Directors' Ownership?
By Yasser Nafei

For many years, I have been puzzled by a very logical question. If board directors are claiming to share the same goals, aspirations, and motivations as shareholders, why aren't they investing in the stock of the companies they govern? Shouldn't a direct investment of their own money be a prerequisite for sitting on a company's board?

Throughout the years, many voices came to support or oppose the concept. On one hand, in June 2002, Time magazine published an article by Daniel Kadlec called "8 Remedies." The article proposed ways to improve corporate governance-mainly in the United States. The author proposed that one effective way to get directors' immediate attention and ongoing commitment is to allow them to buy a large chunk of a company's stock as the price of entry, and be paid only in shares or options with long vesting periods.

On the other hand, many opponents of that proposal argued that having directors-as-shareholders opens the door for fraud, stock inflation, and other illegal practices that roll back the board directors' independence. They cite scandals at Tyco, Enron, WorldCom, and others, where compensated directors aided corruption by turning a blind eye. Many also enjoyed the inflated stocks at the expense of integrity and ethics.

Now let's put on our social justice hats and think about the proposal. Don't you think that when corporate directors invest their own money in the stocks of the companies they manage, that we might witness a complete suite of new behaviors? Can anyone deny that these people would become more active, energized, vocal, and willing to challenge management and reach out to employees to learn more about issues? In short, can the logic deny that direct investments would result in further committed and engaged boards?

So instead of generalizing and prematurely accusing corporate directors of being corrupt, why don't we give the concept a chance? Ron Sargent, Staples Inc. Chairman and CEO, once said, "Money does not trump integrity. Incentives to perform do not translate into incentives to cheat. Values like integrity and courage are alive and well in most directors and executives."

Other sophisticated opponents stress that there is no empirical data to support the link between directors-as-shareholders and companies' improved financial performance. So again we find ourselves back to the old economics model that believed that financial metrics were the only relevant measure of success. However these days, many have already complemented that obsolete financial view with other attributes of success including social responsibility, positive and motivating work environments, long term viability, sustainable and growing customer bases . . . So are we dreaming? Absolutely not.

In March 2005, USA Today ran an article on Staples, the Boston-based company established in 1986. It is considered one of the world's largest office products companies with over 76,000 associates. In 2007 the company reported sales of $19.4 billion and was operating in over 22 countries worldwide. In its policy to align the interests of its board of directors and shareholders, Staples required its directors to accumulate at least $200,000 in company stock over five years.

It's called "having skin in the game." Staples's stock has been consistently improving over the years and despite the fact that we cannot attribute this financial success to the directors-as-shareholders concept, such a move counts as a contributing factor. In the interview, CEO Ron Sargent explained that to have a well-governed company, the focus should be on balancing the loyalty and independence of board directors, including surrendering incentive pay when company results are found to be overstated.

Staples even went a step further to ensure that top management are really vested in the success of the company by mandating that senior executives own at least five times their annual salary in stock. Staples also earned kudos for paying their directors varying amounts dependent on their board ranking as well as meeting attendance. There is no doubt in my minds that Staples's steps exemplify the level of commitment and dedication of its board of directors. It clearly shows a board that is vested in the future of the company and a true focus on helping it to achieve success.

Since we are on this optimistic tone, we can also highlight that in 2004, and prior to its merger with Verizon, MCI announced that members of its board of directors would invest 25 percent of their directors' fees in MCI common stock. This commitment reflected the directors' maturity and willingness to try a new initiative. Some global companies already require their board directors to contribute at least $75,000 as a guarantee that these individuals will feel compelled to contribute their time, intellect, and emotional energy to serve shareholders.

In summary, requiring board directors to purchase shares of their companies' stock is an opportunity to strengthen their commitment, benefit the shareholders, and align the interests of directors with multiple stakeholders. In multiple occasions we have alluded to the fact that many directors are concerned only with pursuing their own interests, such as beefing their resumes, gaining status and recognition, or increasing their pay and benefits. However, the benefit of this proposal is that it helps companies to vet uncommitted directors.

Simply put, directors who do not believe in the future success of their companies will hesitate to put their own money forward, and will withdraw. Contrary to the low-risk directors' stock options programs, which only serve to retain uncommitted directors, the new proposal will help retain only those vested in the long-term viability of their companies. I also further contend that the level of directors' investment should be proportional to the size of the company. A board member joining an international conglomerate might need to invest by multiples of their investment in a startup. While this might be an obstacle to hiring talent that is nonetheless cash-poor, I propose that corporations could advance part of the directors' salaries or bonuses and allow them to use it to buy equivalent stock.

In short, we need not only to continue our appeals for meaningful employees' ownership but also embark on a new frontier and demand directors' ownership.

Norman Kurland's comments:

There is merit in Dr. Nefei's idea that corporate directors in major corporations should have "some skin in the game" — that is, they should have a significant investment in the company for which they make policy. However, in my opinion that will not end "corporate dictatorship" within the existing top-down institutional environment of monopoly or exclusionary capitalism. It will not change the system.

What will change the system of wage slavery, welfare slavery, debt slavery and tax system are new leaders united behind a game-plan to adopt the lifting of artificial barriers to more universal access to capital ownership. Such true "social entrepreneurs" must begin to champion a new macro-economic system beyond conventional Keynesian "mixed economy" principles, a system we call "the Just Third Way." The Just Third Way is a system based on the Kelsonian theory of economic justice, Capital Homesteading legal reforms, and Justice-Based Management principles of leadership and management. The old macro-economic model, in my opinion, should be discarded and replaced by the new Just Third Way model by "architects of the future" such as Dr. Nafei.

Besides other basic writings on CESJ's "virtual library" at www.cesj.org, we should reference yesterday's blog posting on how to build ownership and free economic growth from the slavery of past savings and accumulations concentrated within today's top 1% of humanity, an elite that control most of the world's money and credit systems. The Capital Homestead Act was designed to rectify this barrier to more universal and more efficient access to capital ownership among the multitudes of have-nots of America and the world, without infringing on property rights of existing haves. This link on Capital Homesteading leads to other writings for more detailed explanations of critical reforms needed to build a more just, more free, and participatory market economy. The paper on "A New Look at Prices and Money" gives a more theoretical explanation of the new system needed to change the mindsets of the elite now controlling corporate governance.

How governance power is allocated determines whether corporate dictatorships will be perpetuated or will wither away. Since economic power has and always will follow property, and who has control rights follows who has control over money and finance, then the democratization and justice in corporate governance, and basic issues of accountability and transparency will only change when enough new leaders come together who can influence public opinion and votes to change "the system" that determines future ownership of new capital and future asset transfers. Then the theory and principles of Justice-Based Management will become part of everyone's education and we will overcome the subtitle of Dr. Nafei's book, Corporate Dictatorship: The Evil Behind the Collapse of the World's Economies.

That "evil" is the system of Monopoly Capitalism, controlled by an extremely tiny fraction of humanity who controls money power, and through their money power can control those who govern the corporations, the governments of the world, education, the media, etc. Requiring that those "eligible" to serve as corporate directors to "purchase" shares in the corporations for which they make policy, is like giving aspirin to a dying cancer patient who needs more radical surgery or more advanced cancer treatment. Once we can agree that the diffusion of money power and access to future ownership on asset-backed capital credit will save the market system, then there will be more widespread implementation of Justice-Based Management.

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Visit by Dr. Muhiuddin Khan Alamgir to CESJ

This is an expanded report on the visit to CESJ by Dr. Muhiuddin Khan Alamgir, former Minister of Planning of Bangladesh and current Member of Parliament. Dr. Norman G. Kurland picked Dr. Alamgir up at Dulles International Airport around 9 am on Tuesday, September 29th, and went directly to visit the grave of the late Senator Edward Kennedy at Arlington Cemetery. Senator Kennedy had written letters of support during Dr. Alamgir's false imprisonment. Dr. Alamgir stayed at the home of Dr. and Mrs. Kurland as their guest during his stay.

As a result of his trip, Dr. Alamgir appears to have deepened his understanding of the Just Third Way and Capital Homesteading as a possible national economic agenda for Bangladesh. Dr. Alamgir gave a very good 40-50-minute talk on his upcoming book and the events leading up to his incarceration before the CESJ core group and other guests, followed by over an hour of exchanges on the meaning of economic and social justice, its applications to Bangladesh and the need for authentic leaders to step up to the plate as advocates of Just Third Way development policy.

We also discussed how in his current position as a member of Parliament and as chairman of the Parliamentary Committee dealing with State-owned enterprises, he could test our strategy for transforming and democratizing one or more State-owned enterprises through Justice-Based Management, after identifying management and especially union leaders willing to lead the nation toward our free enterprise version of economic democracy. Dr. Alamgir, like Norman Kurland, has met with Dr. Muhammed Yunus of the Grameen Bank, and finds CESJ's proposed monetary, banking, and credit reforms under Capital Homesteading fully compatible. We provided Dr. Alamgir with one of our rare hard copies of The Capitalist Manifesto (1958) Louis Kelso's first book with Mortimer Adler, three of our books (especially Capital Homesteading for Every Citizen), and several key papers on Kelso's binary economics, the Just Third Way (especially Father William Ferree's Introduction to Social Justice), and Capital Homesteading reforms.

In the group was our personal friend Dr. Sheik Ahmad Subhy Mansour, a Quranic scholar who is in exile with his family from Egypt, after many months of incarceration and torture by the Mubarek regime. His "crime" was causing religious controversy for his advocacy of an interpretation of Islam that stirred up opposition from extremists in the Muslim Brotherhood and forced him to leave Al Azar University after seventeen years of teaching and writing. Dr. Mansour heads the International Quranic Center and has published a number of Dr. Kurland's papers on the center's website.

In common with natural law scholars of all the major faiths, Dr. Mansour believes that compulsion is incompatible with Islam and other organized religions and ethical systems and world peace can only be achieved by organizing to advance the spirit and principles reflected in such documents as the UN's Universal Declaration of Human Rights. Moderate Muslim leaders and intellectuals like Drs. Alamgir and Mansour must organize other Muslims, inspire non-Muslims to support them, and together offer Justice-based strategies to neutralize Muslim hate-mongers who recruit suicide bombers to randomly kill innocent civilians. There's no better place to start than with bottom-up economic system reforms.

Dr. Mansour's exchange with Dr. Alamgir may have been useful in strengthening Dr. Alamgir's sensitivity to the need in politics for more vigorous advocacy of strategies for lifting institutional barriers to more justice in our development strategies, in our credit and central banking systems, in our tax systems, and all other parts of our economic infrastructure based on the democratization of ownership and economic power.

On Wednesday, Dr. Alamgir spent two hours in the morning doing some touch-up editing of the U.S. version of his book and approving of Rowland Brohawn's proposed cover. Dr. Alamgir seemed pleased with Dawn Brohawn's editing and marketing suggestions. (Dawn, Rowland and Michael Greaney are getting the book ready for printing here, and we're counting on Dr. Alamgir's sons to open up doors in academia to review the book for marketing to U.S. readers.) Around noontime, Dr. Alamgir was picked up at CESJ by a Dr. Kazi, a Bangladishi economist who worked at the World Bank and agreed to return Dr. Alamgir to Dulles for his return flight to Boston.

We received word from his son Joy Alamgir that Dr. Alamgir was very pleased with his visit with us. We enjoyed his company and look forward to helping him and other Just Third Way advocates in Bangladesh.

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On Usury and Other Dishonest Profit, Part XXXV

From the common list of "reasons" we hear why widespread direct ownership of the means of production "can't work" is because workers and other ordinary citizens can't handle the responsibility, can't handle the risk, can't handle the handle, and so on. The one thing that all of these objections have in common is that they typically come from people who are not workers or other real people, but are usually capitalists, academics, and politicians (or their hangers-on).

The answer to these and other objections can be found in an approach to corporate governance CESJ developed called "Justice-Based Management," or "JBM." This was previously called "Value-Based Management," but that term became associated with programs intended to maximize share values, a distantly-related but not entirely congruent approach that ignores the necessity of worker and citizen ownership. What follows is taken in large measure from "What is Justice-Based Management?" on the CESJ website.

Justice-Based Management (JBM) is a leadership philosophy and management system that applies universal principles of economic and social justice within business organizations. The ultimate purpose of JBM is to create and sustain ownership cultures that enhance the dignity and development of every member of the company, and to economically empower each person as an owner and worker.

JBM promotes a company's long-term profitability within the global marketplace by enabling all worker-owners to serve and provide higher value to the customer. JBM connects every worker's self-interest to the bottom-line and long-term success of the company.

The JBM process builds upon a written articulation of the philosophy and principles of the company's leader (typically the CEO or chairman of the board) and leadership core group, in terms of universal principles and core values of the company. JBM proceeds in stages to build a consensus upon these fundamental shared values and vision of the company within each work area of the company.

These articulated values provide the foundation for enhancing the productiveness of workers and company profitability, and include such structures as employee-monitored economic incentive programs, participation and governance structures, two-way communications and accountability systems, conflict management systems and future planning and renewal programs.

One of the main components of JBM is the "empowerment ESOP." While the Employee Stock Ownership Plan (ESOP) was originally invented as a means for providing working people with access to capital credit to become owners of corporate equity, most ESOPs are set up as just another employee benefit plan or tax gimmick, or as an employee share accumulation plan ("ESAP"). Most ESOPs today are not designed to treat worker-owners as first-class shareholders. The "empowerment ESOP," on the other hand, is designed to encourage workers to assume the responsibilities and risks, as well as the full rights, rewards and powers, of co-ownership.

Furthermore, all academic and government studies to date have concluded that ESOPs alone are not enough to affect individual and corporate performance. Within a JBM system, in combination with a regular gain-sharing program tied to bottom-line profits, and structured systems of participatory management, the empowerment ESOP stimulates everyone in the company to think and act like entrepreneurs and owners.

Justice-Based Management offers an ethical framework for succeeding in business. JBM balances moral values (treating people with fairness and dignity) with material value (increasing a company's productiveness and profits while enriching all members of a productive enterprise). JBM's three basic operating principles are:

1. Build the organization on shared ethical values — starting with respect for the dignity and worth of each person (employee, customer and supplier) — that promote the development and empowerment of every member of the group.

2. Succeed in the marketplace by delivering maximum value (higher quality at lower prices) to the customer.

3. Reward people commensurate with the value they contribute to the company — as individuals and as a team.

Justice-Based Management is guided by the concept of social justice, as articulated by the late social philosopher William Ferree, S.M., Ph.D., and summarized in Introduction to Social Justice. Social justice involves the structuring of social organizations or institutions (including business corporations) to promote and develop the full potential of every member.

JBM also embeds within an ownership culture the three principles of economic justice defined by the late lawyer-economist Louis Kelso and philosopher Mortimer Adler:

1) "participative justice," or the right to the means and opportunity to participate in the economic process as an owner as well as a worker;

2) "distributive justice," or the right to the full, market-determined stream of income from one's labor and capital contributions; and

3) "harmony" (or social justice), or the right and responsibility of each person to work in an organized way with others to correct the "social order" or institution when the principles of participative or distributive justice are being violated or blocked.

Within JBM the principles of social and economic justice provide a logical framework for defining "fairness" and structuring the diffusion of power within the corporation.
Structuring Ownership Participation

JBM is designed to systematize and institutionalize shared rights, responsibilities, risks and rewards within all company operational and governance structures involving:

• Corporate values and vision

• Leadership development and succession

• Corporate governance and future planning

• Operations (policies and procedures) and hardship sharing policies

• Communications and information sharing

• Training and education

• Pay and rewards

• Grievances and adjudication

A well-designed Justice-Based Management system sharpens and crystallizes the leader's philosophy around "universal" principles, providing a solid foundation for a corporate culture that enables people to internalize these guiding principles. JBM generates organizational synergy by connecting each worker-owner to the financial tools of ownership (i.e., ESOP and profit sharing), participative management systems, and a defined share of power in the governance of the organization. This in turn enables people to make better decisions, discipline their own behavior, and work together more effectively and cooperatively — because it is truly in their self-interest to do so.

Ultimately, no matter what your reasons (or lack thereof) for wanting a just economy, the only way to remove usury as a dominant force in a modern economy — or any economy, for that matter — is 1) to base economic activity solidly on the application of sound principles of the natural law, and 2) eliminate the myth that the only way to finance capital formation is through existing accumulations of savings from your thinking.

Richard Gilbert Biernacki, 1934-2008

Our friend and counselor Rich Biernacki, retired CEO of the world-renowned, 100% worker-owned Fastener Industries of Berea, Ohio, died Friday, November 28, 2008. We'll leave it to the major media to give Rich his just due with respect to his multi-faceted career. This being a blog of the Just Third Way, we'd like to expand on the significance of what his obituary briefly described as "his dedication to employee ownership."

As others have noted, Rich Biernacki served as president of the ESOP Association and on the board of the National Cooperative Bank of Washington, DC. Under his leadership, Fastener Industries became the focus of much attention and the recipient of many awards, including CESJ's "Global Award for Value-Based Management" (renamed "Justice-Based Management"). In 1991 Rich received this award on behalf of Fastener Industries during a series of seminars at the Vatican. Along with the CEOs of two other ESOP companies receiving the award, he met His Holiness John Paul II during the weekly public audience. To the credit of Rich Biernacki's persistent vision, Fastener is the only company in that original group of awardees that still embodies essential principles of Justice-Based Management.

To describe Rich's accomplishment simply as being the former head of an employee-owned company says nothing about what made Rich Biernacki unique as a leader. When the family that owned Fastener Industries decided to sell, they offered Rich, the Chief Financial Officer, the opportunity to become sole owner of the company. The family probably had not even considered selling the company to the workers that had helped make the company a success.

Rich declined the original offer, insisting on giving every Fastener employee an opportunity to become an owner in the company. As a Certified Public Accountant, Rich was aware of a relatively new financial technology, the Employee Stock Ownership Plan (ESOP) invented by Louis O. Kelso. By setting up an ESOP trust, Rich and Fastener's management- and non-management workers were able to borrow enough money (capital credit repayable with the earnings of the company) to purchase Fastener Industries at the fair market value.

Rich then did something that runs counter to the top-down management philosophy practiced today in most companies, including ESOP companies. He made sure that the worker-shareholders were permitted under the ESOP to vote their shares. Rich believed "it's not ownership if you can't vote your shares." The worker-shareholders (management and non-management) nominated and elected the board of directors and Rich Biernacki was appointed CEO. Every year Rich put his job up to a vote; he won approval every year until he chose to retire. After he retired, Rich kept his shares in the company, rather than "cashing out" as is typical, demonstrating his continuing confidence in the company, its worker-owners and its Justice-Based Management culture.

The ESOP, as it now exists in the law, allows upper management to keep their fellow workers powerless. Ownership through an ESOP is considered "beneficial ownership," meaning that the legal ownership resides in the ESOP trust, and the trustees (who are usually upper management or a bank selected by management) pass through only as many of the rights of ownership as they see fit. The trustees of an ESOP often hold back many of the rights of ownership from other workers paternalistically "for their own good." It takes a rare leader, confident in his ability to educate, empower and enrich others to work for their common interest as owners, to use the ESOP as it was intended — to get the full rights, powers and responsibilities of ownership to working people.

Before Rich instituted a participatory ESOP, Fastener was probably like many family-owned companies that make every effort to treat their employees "like family." They set up programs and incentives to make their people "feel like owners." The problem with such an arrangement, however, is that it relies far too much on the goodwill of the small number of people in power. Non-family employees, well aware that ownership usually remains exclusively with family members, can become alienated when they see promotions and good assignments go to owning relatives with fewer qualifications than non-owning employees.

Such companies frequently hold back the final — and strongest — link in the chain that turns employees who merely "feel like owners" into genuine co-worker-owners with the property rights of ownership. Rich Biernacki did not simply create the appearance of participation at Fastener Industries. He did something far more meaningful. He instituted democratic governance and ownership participation by workers within a corporation.

In Fastener Industries, Rich Biernacki offered an example that other ESOP companies would do well to emulate — a successful and profitable approach to sharing power. Trustees can make certain that worker-owners have as many of the rights of real ownership as the law allows. They can reject the semi-honest "escape routes" the law offers trustees and upper management. These are ostensibly to protect workers from making "bad" decisions in their own interest as owners, but actually keep real control concentrated at the top. Like Rich, corporate executives can follow a justice-based leadership philosophy and start instituting justice-based management.

Rich Biernacki's life accomplishment was thus not to become a great man himself, but to assist his fellow workers in becoming great by working effectively with others. He was not the more-or-less wise and benevolent father figure, carefully shepherding his children through the vicissitudes of fortune and building a great company "single-handedly." No, Rich Biernacki was the quiet servant-leader, who gave working people the opportunity and the means to own, develop and succeed together. In the process, Rich Biernacki became great, not because he sought greatness for himself, but because he helped others to seek it in themselves.