Now that the taxpayers from the United States and Canada are majority owners of General Motors (GM), it must learn how to provide taxpayer value beyond the usual shareholder value. One of the first ways to do this is for its most senior executives immediately to set a clear cultural leadership example. They must commit to the greatest measures of transparency and accountability. This means, at minimum, meeting if not exceeding accountability and transparency measures required of publicly-traded companies. 

This is why it is so disturbing that two of the most senior executives at GM were recently quoted in the New York Times demonstrating gross disdain for their angel investors – American and Canadian taxpayers. Their comments raise grave concerns about whether GM executives fully appreciate the privileged access to, and will properly care for the precious tax dollars Canadian and American taxpayers have provided them. 

GM’s interim Chairman, Kent Kresa and its CFO, Ray Young, both have suggested that because GM is now a “privately held” company, it might not provide public financial disclosures. Technically that may be following the letter of the law. However, taxpayers deserve better. Taxpayers should have the right to know why, how and where GM invests, manages and cares for their money; who makes the investment decisions; what assets are owned on their behalf; and how the investments are performing. 

Mr. Kresa reportedly went so far as to state that such accountability and transparency “takes too much energy.” To make it worse, he said this only two days after getting the largest corporate bailout in Canadian history and one of the largest in U.S. history. His attitude smacks of typical bureaucratic secrecy and demonstrates usual political disregard for the cash he now has his hands on. 

When pushed on this matter GM suggested it may provide “regular disclosures while it is private.” Sadly, executives were silent about the frequency, the quality, and the audience for the release of such important financial information. This kind of ambivalent and ambiguous political response is unacceptable from executives now in receipt of over $60 billion (U.S.) of taxpayer money from at least two countries. Past shareholders of GM, clearly, were satisfied with this approach to corporate management. Taxpayers, however, should demand better.

Now that taxpayers in Canada and the United States own 72 per cent of GM – 60 per cent American and 12 per cent Canadian – the company should commit, at least, to complying fully with all reporting requirements expected of a public-traded company. This should include making public audited quarterly and annual reports complete with analyst calls. GM should hold open annual meetings with a similar format to those of public firms, except perhaps for board elections.

Executive compensation is also an important hot-button issue, especially for firms getting taxpayer bailouts. As a result, GM should continue to release proxy circulars disclosing to the SEC’s Edgar site and Canada’s Sedar.com site the compensation amounts and programs for its executives as well as its board members 

GM Canada is a wholly-owned subsidiary and has not provided any separate public financial disclosure either for performance or for its executives. It should be made to do so. With in excess of $9.5 billion (US) of Canadian taxpayer money being given to this firm, Canadian taxpayers should have a right to see how their money is managed by GM Canada as well as by GM head office.

Finally, the Canadian and American governments may each appointment directors to the Board of Directors. They should do so quickly. The candidate should undergo a selection process similar to that of a Supreme Court Justice. A committee of elected officials should have oversight for this appointment to ensure that the candidate will appropriately meet the criteria for a taxpayer representative, thus avoiding the appointment of another partisan hack, as too often happens with such appointments.

Our governments should not have bailed out auto companies in the first place. But now with so much taxpayer money at stake in both the United States and Canada, GM must hold itself up to the highest standards of transparency and accountability. It is only through such actions that taxpayers may have any confidence ever of seeing any return on this large investment, let alone a positive return.