by Alan Kohler
The Sydney Morning Herald
8 June 2004
www.smh.com.au

The "Macquarie Model" is justly famous around the world. It is quite possibly the most efficient method of legally relieving investors of their money ever conceived an Australian invention as unique as the stump-jump plough.

It was invented for power stations, extended to toll roads and airports and is now about to be stretched to radio stations through a takeover of Reg Grundy's RG Capital Radio. Clearly, there is no business that the genius of the Macquarie Model cannot enfold.

In some ways, the idea looks like a redesigning of capitalism itself that is, the separation of ownership from business management. Since the evolution circa 1600 of the joint stock company with the ill-fated South Seas Company, owners have elected directors who have appointed salaried managers: the directors' job is to protect the owners' capital from thievery and excessive risk while restraining the agency costs of management.

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Posted by dcjaya at September 24, 2007 11:03 AM