I wrote this ages ago, but for whatever reason I never I published it, it seems half finished but reading it I think it is still valid.
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I have been thinking a lot about corporations lately. I went to an Accenture Christmas party at the ROM on the weekend (which was lovely) and was shocked to find out how many people it actually employs. And I began talking to my host about why I left the workforce and it began to clarify some of the challenges I have with corporations and the way they are operated and governed.
Some of the issues lie in the notion of personhood. This is the idea that corporations are entitled to same rights as you and I. Freedom of Speech, religious freedoms, the freedom to speak about political issues. They can own property, sue and be sued. As Mitt Romney once said, “Corporations are people, my friend.” But of course they aren’t. You can’t throw a corporation in jail. You can’t execute a corporation (although maybe we should start).
Corporations are important tools of business. They allow a group of people to operation as a single entity. They provide protection for the workers, shareholders and directors by limiting the liability of the individuals. But there is the crux of the problem who is responsible. Ambrose Bierce once wrote,
Corporation: An ingenious device for obtaining profit without individual responsibility.
How can we structure our laws to hold corporations more accountable? For example there is a company in Vancouver that stole $3 million in wages from it’s employees and was fined $500. There are stories of logging companies illegally harvesting timber and then paying a portion of that in penalties. Banks that pay millions in fines for laundering billions, often for criminal organizations. Or Google illegally tracking individuals without their consent. It might sound strange but what is a million dollar fine, if you made ten million in transaction fees? That is just the cost of doing business.
Sometimes individuals are held accountable. For example there were some executives at Enron who were charged and sent to prison but most made out like bandits selling their shares prior to the collapse. It was everyone else who suffered. Shareholders lost an estimated $74 billion dollars and the employees lost $2 billion from their pension. As corporations become larger the potential for damage increases as well, especially when the corporate culture becomes toxic. One just has to look at the last economic collapse which saw the public (the government) bailing out the banks. To which the banks then turned around and gave themselves bailouts.
So one of the first things would be to enact a law that sees any profits from illegal activities immediately stripped from the corporation. If a bank makes $40 million laundering money don’t fine them $10 million, fine them $50 million. If a company illegally harvests $250,000 worth of timber, fine them $300,000. What is a $17 million dollar fine to a corporation the size of Google?
We have to make the penalties such that corporations become vigilant within themselves for illegal activities. I don’t expect the CEO of BMO to know what every trader is doing, however I do expect him to promote and support a culture that does not tolerate skirting the law. I expect every coworker, every manager to understand that their yearly bonus is on the line if someone breaks the law.
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Continuing the corporation thoughts. GM recently announced it was closing it’s plant in Oshawa. I don’t drive a GM and I don’t know anyone in Oshawa, I was a little put out by this announcement. Ten years ago the government provided GM with a massive bailout around the same time as the banks in the US were in trouble.
Canadians will be out $3,5 billion in this fiasco. Here is the part that pisses me off, and where politics and business should not be mixed. There are 2,500 unionized employees and 300 managers. Rather than giving the money to GM we could have handed each employee $1.25 million dollars each and told them to get re-trained and find work elsewhere. Or we could have invested that money in new technologies, or universal basic income.
What is happening is the business leaders mingle with the politicians and get bailouts. Remember how all the bank leaders got bonuses after the government bailouts in the US?
Trump in the US is relaxing pollution restrictions for companies in favor of profits. He has no plans to deal with the country’s debt, and he has publicly stated he doesn’t care about the issues because he won’t be around.
If we want to actually save the planet, we need to change our laws around corporations. All the “corporate responsibility” bullshit is greenwashing, nothing more. Corporations do not care about the environment, or gay rights, or equality. They can’t, they’re not people despite personhood, they do these things because it is beneficial. It allows them to hire the best people, or attract investors, or sell more products.
Corporations were built for one reason – profit. And we cannot be upset that economic evolution has put us in a position where corporations are effective at what they do. We cannot be surprised when a corporation like Amazon or Apple reach evaluations of half a trillion dollars while destroying communities or mistreating employees. We cannot be surprised when economic pressures force companies to layoff employees, they’re doing what they have evolved to do.
If we really want to see change we have to change the environment that corporations exist in.