Taming the Corporate Beast

The litany of economic disasters in national headlines changes regularly, but a recurring theme is the role of transnational corporations (TNCs) in creating or exacerbating each new calamity. After the 2008 financial crisis, the near nuclear meltdown at Fukushima, the massive BP oil spill, and more, there is global awareness of the dire consequences of tolerating corporate misbehavior and greed. Despite their rhetoric, the priorities of TNCs are fundamentally at odds with the basic social goal of enhancing human freedoms and well-being. It can no longer be denied that the institutional framework regulating global giants requires a thorough transformation.

Such a restructuring of our major institutions depends on the liberating knowledge that is being developed through the collective work of agents of change. In this article, I focus on efforts to bring structural changes to corporations that would bring new standpoints to corporate decision-making bodies and, in this way, change the values and control of corporates.

I begin with a look at current soul-searching in the business community and efforts that have, at best, beautified the corporate beast. Corporate misconduct and abuse of power have reached such extremes that even leading thinkers of the business community are expressing shock and dismay. Consider the words of Colin Mayer, founder and former dean of the business school at Oxford University:

The corporation is becoming a creature that threatens to consume us in its own avaricious ambitions. We need to address its failings as a matter of urgency, not only to avert its damaging effects on our prosperity, social cohesion, and the environment, but also because it offers the lifeline out of the dismal science’s constrictions. i

Notice that Mayer concludes with a plea for a new kind of corporation, one that would help solve, rather than exacerbate, today’s economic problems. This new corporate entity, presumably, would live harmoniously with the communities where it is located; act in accord with shared values and goals; protect human rights and the environment; and contribute its talents to solving the global challenges of climate change, inequality and poverty.

There has been a wave of attempts to make corporations more responsible, as well as increasing debate on corporate governance. Many business experts argue that only a new corporate culture and a restructuring of corporate management can end the corporate behavior that they decry.ii

The solutions that business experts offer, however, keep control of corporations firmly in the hands of owners and executives. The fatal flaw here, of course, is that the lure of higher profits has time and again proven irresistible to those at the top of the corporate pyramid. And those higher profits can often be gained through lower employee compensation, weak environmental standards, and cheaper imports produced under dubious conditions. As long as the power of those at the top remains intact, any hard-won gains advancing human rights and sustainability will be on shaky ground. Changing the priorities guiding corporations requires changing who sets them.

Hope for a radical transformation of the corporate beast comes from the millions of people across the globe that are working to hold corporations truly accountable for their actions as well as seeking to construct new economic alternatives. The results of their efforts, in many cases, are truly remarkable. In the business world, these agents of change are working at the local level in organic foods, green-energy cooperatives, and more. Globally, alternative enterprises such as cooperatives are producing a wide range of goods, with sales in the trillions of dollars. In the world of social activism, environmental, human-rights and labor organizations are engaged on many fronts in the struggle for corporate accountability as well as more democratic ownership and control of business. Both activist organizations and alternative enterprises have formed coalitions with business and governmental groups as feasible to advance human rights, and to curtail the rights that business owners have usurped. These efforts are helping to lay the foundation for a new, more democratic economy.