The Church and the Wall Street Rule

wall streetEven though the federal income tax is my main professional interest, I don’t teach exclusively tax classes; every year, I also teach a Business Organizations class.[fn1]

In many business entities (especially publicly-traded corporations, on which I’ll focus here), management of the firm is separated from ownership. The shareholders are the equity owners of a corporation, but the board of directors manages it and makes the day-to-day decisions. And the goals of the board members may differ from the goals of the shareholders. 

Why separate ownership and management? Especially for publicly-traded corportions, because shareholders are presumed to be interested in an investment return, but we don’t assume they have the knowledge or time to oversee what the corporation does on a regular basis. One significant thrust of entity law, then, is to create incentives for board members’ goals to align with shareholders.

Among the tools shareholders have is what is called a shareholder proposal. If a shareholder manages to jump through the hoops necessary, she can present a proposal for other shareholders to vote on; if a majority of shareholders vote in favor of her proposal, it becomes binding on the board.

The main problem with this procedure? Shareholder proposals rarely succeed. In fact, their general lack of success has lead to what’s called the “Wall Street Rule“[fn2]: if you don’t like the way the board is governing the corporation, rather than try to effect change, sell your share and walk away.

A couple conversations I’ve been privy to recently reminded me of the Wall Street Rule: someone argues that the church should change something it does, and someone else responds with something to the effect of, If you don’t like it, why don’t you just leave?

A couple years ago, Lynette at ZD wrote a great post in which she tried to tease out the theological implications of that response; I’m going to come at it from a different perspective, trying to figure out why members who have problems with the church don’t just follow the Wall Street Rule.[fn3]

I mean, on the surface, being unhappy with the management of an investment and with the management of the church share a pretty fundamental similarity: like shareholders, most members are tremendously unlikely to effect fundamental change in the church. The church’s governance tends to be tremendously hierarchical and top-down; though Neylan McBaine apparently argues (convincingly) otherwise, grass-roots movements in the church tend to have minimal direct impact on the church’s direction and, when they do, the effected change tends to be slow and muted.

So why not just walk away and find a church that isn’t objectionable in the same way?

I can’t speak for everybody, clearly. But I can speak to why I don’t find the Wall Street Rule compelling when applied to my religious life, even when I fundamentally disagree with something that the institutional church does or says.

In short, it’s that my investing goals differ from my spiritual goals.

See, investments in publicly-traded corporations are largely impersonal, and ends-oriented. For the most part, I don’t invest in, say, Apple stock because I want to be an owner of Apple.[fn4] I invest in Apple because I want to get a particular investment return, and I believe Apple will provide that return.

But my goal is an investment return. This year, Apple’s return has been about 16% (which is pretty darn good, frankly). But Disney’s year-to-date return has been about 17%.[fn5] If all I care about is return, Disney is about the same as Apple. This year, at least. (Yes, I know: past performance is no guarantee of future results.)

Moreover, I’m a big believer in diversified portfolios: while it would be nice if everything I owned went up in value, proper diversification (that is, being invested in a lot of companies) means that if one company loses its value, I’m hedged.

My religious life is different. Look, I know that there’s very little in Mormonism that’s unique to us. Joseph Smith’s prayer in the Sacred Grove was derived from (though it ultimately differed from) shouting Methodist practices. We were one of many nineteenth-century religions that experimented with communitarianism and non-traditional sexual/marital practices. We were, in fact, only one of many restorationist religious movements.

But the thing is, even if the parts largely aren’t unique, the whole is. The various things that Mormonism appropriated from other sources, the various things that it developed in parallel with other traditions, the various things that are truly unique to us, come together in a package that speaks to me, and speaks to me at a fundamental level.

That is, even while I believe that the church is an imperfect vessel for what God wants us to know, I believe it is the vessel that can lead me—us—to learn what God wants us to know.

And I’m not willing to give that up.

So I can’t effect policy change in the church. I can affect—for the better, I hope—the people I interact with on a weekly basis. I can prepare and teach my lessons, I can offer my hands or my shoulder or my voice. My reach may be limited, my influence forgettable. But I’m not here to vote with my feet; I’m here because I’ve been called to be here.

[fn1] “BizOrg” used to be called “Corporations,” at least when I was in law school. It’s basically a quick introduction to agency law, then it covers the law of partnerships, LLCs, and corporations.

[fn2] (Which was interesting for me to learn—in the tax world, the Wall Street Rule is, If everybody else is doing it, the IRS will let you do it too. Which, for the record, is not true, and the tax Wall Street Rule is (mostly) tongue-in-cheek.)

[fn3] The North Temple Rule, maybe? I have to admit, my knowledge of the sacred geography around the Salt Lake temple is pretty limited.

[fn4] That’s not entirely true: I assume some fanboys and fangirls invest in particular companies to show solidarity, or to feel part of the company. But most people don’t.

[fn5] Note that I’m writing this on Sunday, May 10. When the post actually goes live, those year-to-date returns may well be different.


  1. The problem is that certain people feel as if they are “owners,” in part, of the Church and that it should be responsive to the owners’ desires. The members are not “owners,” however, like shareholders. The owners of the Church are the 15 who hold the Church in trust. The Wall Street rule applies, however painful it may be.

  2. No, RW, it doesn’t. There is no reason that someone who disagrees with institutional church practices or policies should leave, and anybody who claims they should—from the inside or outside—is wrong.

    And “ownership” of the church is a poorly-thought-out metaphor, one that doesn’t match the church’s structure on either a legal or spiritual level.

  3. There is an important way to influence how the Church is governed. With your pocketbook. Commit to paying a tithe, but you decide where it should go.

  4. J. Stapley says:

    I’m here because I’ve been called to be here.


  5. A tithe, you know, is more than the figure 10%. It’s also something that goes into “the Lord’s storehouse,” something that doesn’t happen when an individual distributes his own income in his own way, rather than giving it to the Lord to distribute in His own way.

  6. I find it interesting that Joseph’s intended name for the church only referenced Christ, but in Section 115 the Savior decided that he wanted to include others in the name. And thus we are called “The Church of Jesus Christ of Latter-day Saints.”

    I find our name moving (if a bit longish). It reflects that Christ comes first. But it also reflects that we are a key part of the church. Our desires matter, though of course they must be righteous. Christ cannot direct the church at the pace he would like. He is constantly waiting patiently for the Saints to prepare themselves. Success only comes when the entire church – Christ and the Saints are finally unified.

    Formal revelation may be top-down, but the pruning, digging, dunging, and other prepartory work that precedes the revelation comes at the bottom. That’s the real blessing from grassroots efforts. Not to change the views of leaders, but to open the eyes of average members to greater blessings currently denied because our hearts are closed.

  7. As tithe-paying members who are active in Church life, we are all stakeholders in the Church. What else would we be? As stakeholders, we have an interest in the direction the institution is going. (I think that being stakeholders is much more dignified than being shareholders, in any event.) We can and should be leaving our own mark in the life of the institution. If not, what is the point?

    Some will argue that this is not true, that we don’t matter, that we are not stakeholders in the Church because “God is in command of the Church.” Of course, this is a false dichotomy: members as stakeholders vs. God as in command. It is perfectly possible for God to be in command of an institution in which the members are all stakeholders. Seeing this possibility just requires us to believe that God actually cares about the thoughts, desires, efforts, and vision of his own disciples. I believe this.

    But despite the inner logic of this perspective, some will still forcefully argue that we as members of the Church are not stakeholders in the Church — that the Church is not ours — because God is in control. To those I must ask: do you really believe that God does not think that our time, talents, and everything with which he has blessed or will bless us matter to the Kingdom of God on earth for the purpose of building up Zion?

  8. I get this. I think of my own views. For example: I would like to see the temple sealing policy change and the year waiting period waived, so more nonmember family could see an actual wedding (I’m a convert).

    But that is not the be-all, end-all issue of my church membership. I’m here because of teachings about the Atonement of Christ and the Plan of Salvation, first and foremost.

    While I’d love to see a change, I can live with it if there isn’t one.

  9. Bro. Jones says:

    An additional wrinkle: although it is not easy or common, large corporations can (and do) change direction. For that matter, although not easy or common, our own church can (and has) changed direction at times. While as individuals we may not necessarily have the “right” idea about what should change and when, I think it’s incorrect to shut down the conversation by saying that the board of directors must be running things exactly as they should be.

    I am reminded of a comic which showed business owners throughout the decades objecting to every progressive reform by saying it would shut down their business. “End child labor? We’ll never be able to compete!” “Employ blacks/women? It’ll ruin our business model!” “Employee safety regulations? We’ll never make our bottom line!” Saying that change is difficult or not universally liked is just as bad as saying that the status quo is completely equitable and should be desired by all.

  10. John, we’re stakeholders, but not shareholders. We have a vital interest in this church, but not an ownership interest.

  11. Assuming for the sake of argument that you are correct (some people desperately want this to be true — that we as the Church’s members and the Lord’s disciples have no ownership interest in the Church — don’t they?), then guess who else doesn’t have an ownership interest. The 15 Apostles.

  12. John, that’s absolutely right. While the First Presidency and the Quorum of the Twelve direct the church, they don’t have an equity interest in it (at least, not an economic equity interest—I’m not entirely sure how the church as an entity is structured).

    But that’s the whole world of principal-agent relationships: the decisionmaking is separated from ownership.

    That’s not to say that non-owner stakeholders aren’t important; in the corporate world, suppliers, customers, and the community are all important players, and corporations need to balance the interests of each stakeholder. And honestly, both from a technical perspective and from a personal perspective, I like the idea of being a stakeholder—rather than a shareholder—in the church.

  13. Yes, exactly. The distinction is critical.

  14. Wandering or wondering says:

    This is oddly comforting to read today.

    My son and husband and I are working overtime to finish a final Eagle Scout application. Parts of the experience, including an email I just received from a ward member, are beyond ridiculous. The ward and Council are very particular about details and things have to be done just so. One leader keeps insisting that parents not be involved in the process; the application has to be bound this way and not that; certain parts of the application need to be rephrased; an essay needs to be rewritten to include such and such information and provide additional details of some sort or another; the Council has to have six letters of recommendation in hand; additional people need to sign additional paperwork; one form was lost by someone in the process and needs to be recreated; etc.

    All the additional requirements besides the ones actually stated by the national organization are not listed anywhere; they’re just trickling in one at a time over months, and thanks to delays caused by the ward and additional requirements instituted by BSA in 2014, and the fact that my husband and I have had to be merit badge councilors for 15 merit badges to make this happen, this is all happening the same week my son had five AP tests.

    It seems a fitting conclusion to what has been an almost uniformly mediocre or substandard Scouting and Young Men activity experience for my son. (Small ward involving long distances and constantly changing and over-committed Scout and YM leaders, and neither program seems to work well in any case after the boys are about 14.)

    Many times my husband and I have hoped and prayed that the “activity arm of the Aaronic priesthood” will not crush the tender spirits and growing testimonies of my son and his younger brothers, and that they will continue to find joy in their priesthood service, but we continue to fight the uphill battle since we have commitments to both family and gospel that are more important than Boy Scouts of America, more important than all the aggravating details.

    In effect, we’re training our children to help build up Zion and serve in a Christ-like way, so we’ll support the current programs whatever they are and put a positive spin on it for our children, but if the Church would do away with the archaic and bureaucratic and horribly aggravating Boy Scout program, I would dance in the streets of [small town about an hour from the Atlantic Ocean].

    This is a long comment, but in all its wandering intricacies, I’m basically agreeing with Sam’s final sentence, “I’m not here to vote with my feet; I’m here because I’ve been called to be here.”

  15. The Other Clark says:

    Actually, from a legal standpoint, the Church is set up as a Corporation Sole, so there’s only one shareholder/owner, the Trustee-in-Trust.

    FWIW, in practice I find the metaphor of the “Kingdom of God” to be more useful than allusions to the military (“general officers of the Church”) or corporate models.

  16. Nice, Sam — thanks for the thoughtful post.

  17. If the Q15 and First Presidency aren’t shareholders (but management) and ownership and management are separated in the church too, then does it still hold that it’s incredibly difficult for the church’s owners (God, Jesus Christ, and the Holy Ghost) to get the church to move the way they want? Why don’t they invoke the Wall Street Rule? Or am I just pushing the model to its breaking point?

  18. On the other hand, tackling those questions is almost certainly beyond the scope of your (interesting!) post, Sam. I don’t want to threadjack.

  19. Dave K – Thanks for sharing that. One of the most insightful comments I have read in a while.

    Wandering – The handling of Eagle Scout applications by local councils can be a massive pain and is one of the more frustrating processes I have been through. I am pretty sure this is done to test the patience and determination of the Eagle applicants in order to prepare them for a world that is full of frustrations, red tape, and irrational behavior. That’s the best I can come up with.

  20. I see the OW effort as a case in point, where a group of women mistakenly think that they have some sort of ownership or stake in the Church. They proceeded on the basis, that their “ownership” had some meaning when, in fact, it does not. If they had understood the ownership position they might not have forced the issue to an excommunication. Would it have been better to have just left the Church than to force a painful and humiliating excommunication? I suppose they could have tried to be quiet and docile Church members in the face of an issue that was of overwhelming importance to them.

    We, as stakeholder/members, either have agree to live with an irritation due to Church management, or, if the irritation is great enough, the only other alternative is to find other outlets for our religious longings. There is no process by which the stakeholders/members have any legal or organizational standing in the direction of the Church.

  21. Mike R. says:

    The Other Clark: To be precise, in the U.S., The Church of Jesus Christ of Latter-day Saints is an “unincorporated religious association” — the Corporation of the Presiding Bishop of The Church of Jesus Christ of Latter-day Saints (CPB), and the Corporation of the President of The Church of Jesus Christ of Latter-day Saints (COP) are ” ‘corporations sole’ organized under Utah law to perform various activities on behalf of the Church.” Corporation of the Presiding Bishop v. Amos, 483 U.S. 327, 330, n. 3 (1987) (Justice White isn’t necessarily an expert on LDS Church corporate structure, but he ought to have been correctly briefed). The corporate existence of the Church itself appears to have ended as a result of the Edmunds-Tucker Act. COP and CPB are tax exempt 501(c)(3) organizations; Deseret Management Corporation (DMC) appears to hold tax-paying subsidiaries on behalf of the Church. I can’t tell, from a quick search, whether all the other corporations like Intellectual Reserve, Inc., Property Reserve, Inc., etc. fall under one of those three umbrellas or if there are any other top-level organizations.

    Basically, the Church isn’t a corporation sole (which one would it be?), or even a set of corporations, sole or otherwise. The Church is a group of people associated for religious purposes. That association has rules about it’s governance, like many other unincorporated associations (notably labor unions), but those rules are found in the Church’s own scriptures setting up the presiding quorums of the Church, and in handbooks promulgated by those quorums pursuant to their scriptural authority, not in corporate charters or by laws. Ownership misses the point — there’s not a single owner in the form of the President or Presiding Bishop, nor is the Church owned by it’s members. The Church isn’t *owned by* us; it *is* us. Nevertheless, the shareholder/director analogy is apt, since the Church is largely managed by relatively small quorums, not by everyone who has an interest.

  22. It’s difficult to analogize the kingdom of God to the corporate legal fiction that is “the church.” I don’t think there were any laws that existed during the BOM days that addressed corporations, LLC’s and the like, yet there are still plenty of references to “the church.” It seems like the old handbook actually mentioned what “the church” really was, but I can’t put my fingers on it. Anyway, while I’ve had the uncharitable thought from time to time of “why don’t you just leave,” I know the invitation is to stay or come back. The disagreements reflected on the bloggernacle range from a mere gripe about what toilet paper should be used in chapel bathrooms to whether the Q12/FP are tools of Satan. It’s that far extreme that generates such dismay, as it seems the commenter holds feelings so foreign to basic LDS beliefs that he/she might as well be a non-member.

  23. “It’s that far extreme that generates such dismay, as it seems the commenter holds feelings so foreign to basic LDS beliefs that he/she might as well be a non-member.”

    Like the extreme idea that women should have an equal voice.

  24. IDIAT, except that who are you (or, for that matter, who am I) to determine that any member might as well be a non-member? My point is, you and I aren’t. I don’t necessarily understand another person’s calling, why she stays, what the church means to her. And I’m certainly in no position to invite her to leave. And, frankly, doing so—even in my head—shows a distinct lack of Christian understanding and goodwill, and reduces me as a person.

    And it demonstrates a self-centered arrogance that is unbecoming.

  25. Michael says:

    I think I could make the argument that I’m not a shareholder in the Church, but the Church is certainly a shareholder of me. And they get to use the Wall Street Rule – if they don’t like the way I behave, they can sell me off through excommunication.

    After all, we have thousands of little kids singing each Sunday about how they belong to the Church…

  26. Sam – there is no “except” which is why I noted that I know the invitation is to stay or come back. If you have never wondered in your life why someone joined or stayed a member of the church then perhaps you are ready to be translated.

  27. Down the road of corporate analogy, what you’ve described is a lot like a publicly owned corporation with an overwhelming majority holder that elects his own slate to the board. That’s a situation in which minority shareholders have virtually no power but to hold or sell, and probably cannot realize full value by selling. In such situations in the business world we start thinking about board decisions, business judgment, fairness, even fiduciary duties. Derivative suits. External legal controls. The voice of one minority shareholder means little or nothing, but external forces can be brought to bear. I suggest that the same happens with the Church and can be shown over time. Some tactics work better than others, but the Church does respond to external pressure even if not (noticeably) to individual members.

  28. Clark Goble says:

    Steve (9:41 AM), I think that’s right. The better analogy is that we’re Apple lovers in the late 90’s hoping Apple improves but having no ability to make those changes trying to decide if we switch to Windows or (gasp) Linux on the Desktop circa 1999. Plus most of the ideas we proposed to improve things were in hindsight horrible and we’re all glad OS X came around. LOL.

  29. symphonyofdissent says:

    I think this is a good but somewhat flawed analogy. The limit to the analogy is that typically shareholders are quite passive. They check the value of their shares and then wait for a check. They may participate in annual votes but that’s it. The church is very different in that it asks us a to participate and take on roles of leadership and service. While the board of directors (Q12) is set by the owner (Jesus Christ), almost all of the day to day operations are carried out by shareholders like you and me. It is dangerous to see our role as passive. Instead, god invites us to act rather than wait to be acted upon, to get out and serve and magnify our callings. That is what we can do that will have the most impact in helping to build the kingdom of god.

  30. Hmm…what happened to the idea from which this blog takes its name:

    D&C 26:2: And all things shall be done by common consent in the church, by much prayer and faith, for all things you shall receive by faith. Amen.

    For those trying to pretend that there is some entity besides the membership of the church who owners or stakeholders of the church it is really curious. The church is nothing but its members. *All* its resources both financial and labor come from members who are all bound by the same rules – unless you believe that General Authorities get to play by their own membership and spiritual rules? The idea that the church is “owned by God” is a nice one. I get it but all evidence points to at the very least a fractured, “through a glass darkly” connection between leaders and the divine. It is simply not true that Jesus is hanging around the temple every Thursday making day to day management decisions about the church. If that were so he would have lots and lots of explaining to do like why he didn’t show up to stop a massacre, allowed his first officers to spend multiple decades teaching horribly racist things about a good portion of his brothers and sisters etc. etc. We are the church. For good or ill. From the 15 down to the your local ward building specialist who cleans the toilets every week. The amorphous hand waving at some

    The tension these days in my mind is that it is becoming less and less true that the church is at least *financially* dependent on its members. It is, but the legal, for profit entities of the church whether it is Land Reserve Inc., Bonneville or whatever have become far more self-sustaining, profitable and stable. They hold huge assets that are now completely separate from tithing (though the original investments that have generated those assets were based in tithing, donations or loans taken out by the church based on the promise of future tithing and donations). I am not a big conspiracy theorist regarding the church being a greedy, financially driven machine designed to maximize tithing. Rather, I think it is much more banal and even opposite that. The church is becoming less and less dependent on tithing and that should worry all of us. It will be well-meaning mission drift in anything that does us in. Regardess, the church is and always will be dependent on our labor, love and commitment – our human resources. No ward feels the sting in its pocket book when an individual or family leave. However, every unit feels the sting when an active, committed member leaves because they have to replace his or her love, labor and service.

    I am with Sam. One does not invest in a church, a cosmology, a spiritual and religious identity the way one invests (as a shareholder) in a business. To reduce religion or organizational membership to that is just depraved. If anything we are more analogous to employees in the Kingdom of Zion – employees not looking for a “paycheck” (though we can get that in kind service, social benefits etc.) but the type of employee who full buys into the mission of the company, its vision. We bleed, we sweat, we sacrifice and put our effort into an organization with others in the hope that we can accomplish something greater together than we could as individuals – in this case to build Zion, to find a communal salvation. That to me is the heart of Mormonism. Why doesn’t one just “walk away” and “invest” our human resources elsewhere? Because we believe in that mission. We believe in not what the organization necessarily is *today* but what it has the potential to become. This is why my ancestors left their families and sailed across the Atlantic. This is the reason that my ancestor walked barefoot across the plains pregnant with 5 children. Its why so many don’t expect or demand perfection from our church just…progress…hope…and meaning. Its why it pains us when we see the organization we love not just make a mistake or stumble but actively hurt other committed saints in deep and horrible ways. It is why we strive with the church when even when we may not agree, even when it hurts. We believe. We have faith. We have charity. And if all some of our fellow brothers and sisters can manage is to tell us to “leave if we don’t like it”…its sad, but it isn’t a serious solution. We, all of us, are the body of Christ. We are the church – shareholder, employee and customer. We are Zion.

  31. Hedgehog says:

    “The limit to the analogy is that typically shareholders are quite passive.”

    But sometimes they aren’t (
    My husband was an employee of Lucas at the time, both at the time of the merger with Varity, and of LucasVarity at the time of the defeat by shareholders. I can say that employees were concerned that Varity intended to raid what was then a pension surplus, and were glad to see the back of Varity.

  32. Great post, Sam.

    As The Other Clark said, we should think of the church as the Kingdom of God. (NB that in this analogy, the general authorities are vice-regents, whose authority is derived from their appointment alone.) It is hard for us a modern people to think of ourselves as _subjects_ rather than _citizens_….

  33. davidkunio says:

    I enjoyed this post. I agree that we are not shareholders in the church. We are however, consumers of the church. You may not own Apple stock, but you have bought into the ecosystem. You have the iPhone, the iPad, the Macbook, the AppleTV. You get all your content through iTunes. If you start to find that iTunes radio isn’t quite finding the right jams, you start using Spotify. You find that Siri give bad directions so you use Google Maps. This is how a modern Mormon deals with some of the issues they may have with the church at large. They don’t leave the ecosystem, but they do supplement with other sources. Some integrate a little better than others. Some are more likely to pull you out of the ecosystem entirely (Android).

    The church does in some ways perpetuate the corporate model. Common Consent itself is like shareholder approval. Two incidents this past Sunday suggest common consent is more form than function (I sat on the stand prepared to give a High Council talk in the same meeting I was presented to the congregation, a friend objected to a sustaining and wasn’t acknowledged). Also, saying that shareholder activism doesn’t work isn’t a good reason to say that it isn’t the model. Maybe the church just hasn’t had effective activists recently. (Who will be the Mormon Carl Ichan or Bill Ackman). Or perhaps the time in the church’s history that is conducive to activism has already come and gone.

    Instead of trying to change the practicies of the church we could try to change the incentives for church leadership. Not local leaders like Bishops, but regional and general leaders. Executive compensation and the exec comp plans are an practical way for shareholders to influance how the company is run. (And the most common source of proxy battles for corporations). While a company might be too focused on short term gains vs long term growth/profitiablity our leaders seem to be focused more on the reputation of the church than the ministry. Instead of the top line membership, number of temples and size/count of units what if the numbers reported at stake conference were % of temple recommend holders with a current/active recommend and % of members that haven’t attended a meeting in the last year? As members can we get that sort of change implemented? That (more than some pronouncement about women in the priesthood or gay marriage) would be effective activism.

  34. This is good. And I completely disagree with the commenter above who said members shouldn’t feel that they are owners, because the 15 who lead us are owners. That’s not how the Lord laid things out. The very name of this website indicates that!

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