Categories: uncategorized
Date: 16 April 2007 15:06:24
I'm currently reading The Corporation by Joel Bakan. You may remember this as a documentary in the cinema about 2 years ago. It follows the history of Corporations from the 17th century through to the present and I'll tell you know that it makes very frightening reading.
You know all the nasty things that modern corporations do, from environmental disasters to predatory pricing and sweatshops? Well it can't be held responsible for them. It is the legal duty of a corporation to make as much money as it can. Anything it does that does not contribute to the bottom line is actually illegal. Unless the executives can prove that an action is done with a view to increasing shareholder returns then it cannot be done.
Those environmental gestures we see? Pure window dressing. Poor maintainance at oil fields and third world sweatshops? Perefectly acceptable.
The executives cannot be held personally responsible unless the law of the land is actually written to make such an action unlawful. The corporation can be fined but there is very little else that can be done to reverse its policies.
Corporations not only earn more in profit than some countries earn in GDP but are also more powerful than most governments. Even the World Trade Organisation (WTO) was specifically set up to represent the will of big business. These unelected individuals are not subject to democratic control. If a government brings in a rule that corporations find onerous then the WTO can fine the government concerned until the law is repealed.
However all is not lost completely. Why? Well, who do you think owns these companies? We do. Yes, all of us who are, or have worked. How? Our pensions invest in these companies. Our private investments in the stock markets own these companies. Therefore its not the executives that control them but us. The executives have to do what the stockholders want. If that means taking a more socially responsible attitude at the expense of profits then we can force them to do this.
But this is a double edged sword. How do we get people mobilised enough to take action? How do we convince people that these things cannot be solved solely by governments but require us to force through these changes?
At present corporations won't change unless they can see profit in it.
Jeff Immelt of General Electric, the world's largest industrial corporation, recently announced a strategy to move into "green energy" in a very big way. This would also mean that the company were too look at green issues in general. This means looking at all its businesses and assessing what needs to be done to make them greener and less wasteful.
What happened?
Well the initiative is going ahead. Businesses are looking at how they can reduce energy useage. GE energy businesses are investing heavily in "green" power and seeing how they can do this; from wind turbines to nuclear energy to cleaner power stations. Even down to turning lights off in empty offices and kitchen areas.
Yet there was a black cloud forming close behind.
One Wall Street investment company threatened to take Immelt to court. Why? because he was acting against the interests of the shareholders. He was putting social responsibility at the cost of profit. This company wanted a worse environment, worse labour practices and the squeezing of suppliers because it wanted more money at the bottom line.
This is towards a company who's profit is in the billions of dollars. Would $1billion less really make a difference?