Corporate Roles in Our Society
In the past couple decades, corporate scandals like the Exxon Valdez oil spill, Union Carbide’s Bhopal explosion, and the collapse of Enron has shaken public confidence in corporate structures to be able to factor in public welfare, and at the same time, increased corporate bankrolling of elections has eroded government’s ability to balance the scales.
Market pressure has begun to shift the way many leading corporations view their role in creating a future with clean drinking water, safe air to breath, and a stable atmosphere. Global climate change specifically has shaken the artificial barriers between economy and ecology as unprecedented weather events have costs hundreds of billions around the world in the last two years. Forward looking business people understand that instability is bad for the economy and the fact that we have left environmental consequences out of the economic equation until now has created a highly uncertain future. Recent studies have even proven that companies who demonstrate a commitment to environmental issues are beginning to perform better in the marketplace. Still, there are some who continue to believe that corporate responsibility is only to the bottom line and to quarterly earnings. On the other side of the fence, groups like Citizen Works, The Polaris Institute, and POCLAD have been addressing these issues for more than a few years and offer some of the best ideas around reshaping the corporate structure within our society.
Where and how does the corporation fit into our society and lives? Is government regulation the answer? How can we re-make corporate strategies and ideals to be more democratic?
12 Responses to “Corporate Roles in Our Society”
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December 4th, 2005 at 6:17 pm
My favorite podcast, the BBC’s In Our Time recently covered Thomas Hobbes’ Leviathan. His main point is that there is no "civilization" without a concession of rights to a governing body. I was immediately struck by the realization that the "free market economy" is essentially still a state of nature—nasty, brutal, and short.
(Except that the animosity that many corporations have for government doesn’t extend to things like copyrights, trespassing, or bankruptcy laws, of course.)
December 4th, 2005 at 9:30 pm
Even more frightening is that the free market economy is essentially concession-less: there isn’t a truly impartial governing body guiding it, unless you consider business the governing body.
December 5th, 2005 at 7:43 am
Here’s a great quote from Abraham Lincoln back in 1864.
“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . . corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”
– U.S. President Abraham Lincoln, Nov. 21, 1864
(letter to Col. William F. Elkins)
Ref: The Lincoln Encyclopedia, Archer H. Shaw (Macmillan, 1950, NY)
It doesn’t take a genius to see what’s going on beneath the veil, just as Abe could see back in the day. People everywhere from Main Street to Wall Street can tell you this and are waking up to the fact that corporations, though originally chartered to serve the public interest, need to bring their practices back in line with modern values.
December 5th, 2005 at 10:38 am
I tend to agree with the observations of John Galbraith . The rise of the modern corporation, according to The New Industrial State (a current read), turned a core principal of free market economics on its head. He saw “a world of great corporations–a world in which people increasingly served the convenience of these organizations which were meant to serve them…So far from being the controlling power in the economy, markets were more and more accommodated to the needs and convenience of business organizations.”
Take the example of Weyerhaeuser. The “world’s largest lumber company� was recently found liablefor $78 million for squeezing its smaller competitors out of “free� alder markets in Washington and Oregon to the detriment of its customers (not to mention the now-defunct competitors muscled out by Weyerhaeuser.
I’ll take mom and pop over big brother any day.
December 5th, 2005 at 7:40 pm
dear friend, Imm readint your article about the problems with corporates and th environment. How some of them have been dangerous to the planet and other not. I think the best way to keep the planet in shape and good condition will be if private companies and the government sector agree to do a resposible management of the environment. I live in Iquitos, a city in the peruvian amazon rainforest, and i can see how some companies can handle the rules to make uit easier for them to get more wood, or goverment treatments with timbre companies. those can be ok, but if there’s a social responsible management, where everybody can count, all the actors in this story, probably we can keep our forest, and make it a better place to live.
December 5th, 2005 at 10:09 pm
I want corporations to be more responsbile. I want them to consider all mankind their shareholders not just the ones with a financial investment. What if we actually DID SEE the world as belonging to all mankind, then each part of it that corporations inhabited, mined, extracted valuable resources from would be accounted for as borrowing from mankind. And let us add the dimension that values the health of the planet as an economic indicator. Let them use the same accounting principles as they do now with those two changes.
December 6th, 2005 at 1:17 am
It seems that the tone of the responses are all somewhat hopeful in having the corporation fixed to our liking; that is to be more responsible. To believe that we can fix or reform capitalism is quite absurd because this capitalistic ideology is in contradiction with environmental and social justice. The whole nature of capitalism is to gain profit through any means deemed plausible; be it environmental or social exploitation. So, I urge people to stop being hopeful in fixing capitalism. Another world is possible; and capitalism should not be in it at all, it has be replaced.
December 6th, 2005 at 6:52 am
Developers should be made to pay their share of the impact on the community and state as relates to water, sewage, roads and schools. They have been getting off easy.
December 6th, 2005 at 9:43 am
Its heartning to see corporations begin to take an active role in the “precautionary principle” whether it be out of the goodness of their hearts, their belief in the strongly growing climate change evidence or to just plain protect their butts.
An article in Time magazine 2-7-2003 by Eugene Linden stated ” The climate change threat that will really get the attention of executives and boardmembers, however, is the possibility that they might be liable for damages. This could happen if insurers like financial giant SwissRe start changing the insurance policies that insulate directors and officers (called D&O insurance) from the costs of lawsuits resulting from the actions of their corporations.”
This statment intrigued me and I have been following the reports posted on the major reinsurers sites ever since.
They take this issue very seriously. Their bottom line depends on getting it right and they arent taking any chances.
When reinsurers establish separate climate change divisions, corporate heads cant ignore it.
Furthermore, to ignore the efforts by the rest of the world to develop and produce new energy technologies will devestate investment in U.S. companies and adversley affect our economy. Doing nothing is no longer an option.
December 6th, 2005 at 11:36 am
Hi,
I would like to see laws passed that made all the individual shareholders and each and every member of management in a corporation personally responsible for any damage tthe corporation causes to people or the environment in their activities. I would like to see a situation where individuals can be personally sued and not hide behind the corporation banner. How about a world wide ethical charter for corporations drawn up with the input of social and environmental NGO’s , that puts people and the environment before profit. People like Anita Roddick of the Body Shop have shown that a successful company can operate from an ethical point of view and still make a profit. Triodos bank in Europe only invests in projects that meet certain ethical criteria.
I know a lot of corporations don’t seem to have got the message that we live in a finite world and many don’t seem to care what they do as long as they make money but we as a species can’t afford this short term thinking. Time for change.
My mum thinks the best thing would be for the human species to be wiped off the face of the planet, that all they really do is destroy. I don’t feel like that but I think that in general governments and corporations are irresponsible and out for short term gain. They don’t care who or what gets hurt in the process. I think we need some kind of structure that imposes a duty of care that is legally enforceable but how we get there I don’t really know.
December 6th, 2005 at 2:10 pm
Kim,
I agree and these are some great ideas to get things started. However, I do think that the corporation (which is a business) cannot put profit as their last priority because without they would become a not-for-profit organization who asks people for their support as opposed to offering goods and services that benefit the public good and community. So, the question is how do you think we can change our corporate structures to care as much about the community’s interest (and really the world interest) as much as they do about the bottom-line?
Also, it’s easier to get people on board with what youo’re doing or thinking if you appeal to their common good.
December 9th, 2005 at 11:05 pm
Hi Japhet,
I have to disagree with your notion that a company who puts profit as its last priority wouldn’t be able to deliver goods and service. First of all, one needs to break out of the paradigm that services and goods can only be provided if there is a profit associated to it.
Take for example, a nationalized oil company that is owned by the people or the state where the main goal of this oil company is to provide cheap affordable oil for the people or any other industries. Even if this oil company doesn’t make a profit, it is done so that the oil is cheap for the public use and industrial use, which in turn fuel the economic development. Instead of striving for profit, this nationalized company serves public interest through its actions. This is the real “public” profit, not a mere monetary profit for certain individuals/share holders.
I urge again for people to break out from thinking that we can fix capitalism. It cannot be fixed and needs to be replaced.