If you are not familiar with the word “voluntold”; here is the definition per the Urban dictionary:
Voluntold: The exact opposite of volunteering. Always used in reference to an unpleasant task to which you have been assigned by your boss.
Example 1:
Co-worker A: I hear you got a transfer to another division.
Co-worker B: Yes. I didn't want to take the job, but I was voluntold.
Example 2:
Co-worker A: Hey, do you want to go to the baseball game on Saturday?
Co-worker B: Unfortunately, I can't. I got voluntold I have to work this weekend.
But “voluntold” doesn’t apply to just the workplace. Husbands are often voluntold to do a variety of tasks, myself included. Some of these tasks may be tolerable but most are not as none of the activities were my idea. Most of us are voluntold to do X and in the interest of marital harmony, we do them.
But watching BP CEO Tony Hayward leaving the White House yesterday, I couldn’t help but notice he looked very similar to our largest banks CEOs after their November 2008 meeting with the Bush administration when they agreed to accept TARP. Like the bank CEOs before him, Hayward had been voluntold to turn over $20 billion in assets to the US Government.
Don’t get me wrong, I believe BP, like anyone who does something wrong, should be held accountable. In addition, the more negligent or egregious the action, the more severe the punishment should be.
Still, being voluntold feels very unsettling, particularly as it seems like it's becoming more the norm than the exception.
About a week ago, Governor Mitch Daniels of Indiana marked the one-year anniversary of the bankruptcy of GM and Chrysler with an op-ed in the Wall Street Journal in which he shared that “It was June 10, 2009 when the government tossed aside the option of proven, workable bankruptcy procedures in order to nationalize Chrysler on behalf of its union allies.” In other words, the bondholders of GM and Chrysler were voluntold to accept less than historical precedent would have suggested.
But I would note the pattern. In all of the voluntold situations to date (our largest banks, GM, Chrysler, and BP) we’ve had enormous organizations with staggeringly large liabilities.
It looks to me like companies with large liabilities or those which are considered “too big to whatever” entities; public policy outcomes can trump capital markets precedent?
But if Washington believes this, I believe that investors must too. And I'd offer that the bondholders and shareholders of the world’s largest companies now face a substantial risk of being “voluntold” should something negative happen.
When it comes to big corporations, the public policy outcome now matters most and will take precedent. But we'd be wise to consider the long-term implications, particularly as the global nature of our largest corporations and financial institutions makes the public policy outcome far more complicated than I believe most people currently appreciate.
