The Corporate Paradox

Last Updated on March 17th, 2020

Film Recommendation

The Corporation (2003)

Understanding its Purpose

A powerful documentary about the role of corporations in modern society. Although a few years old already (as reflected in the graphics), the content is nonetheless very relevant and highly potent. It does a great job of narrating the origins of the modern corporation, highlighting the pros and cons of incorporation. These disadvantages are made apparent by the malfeasance of some of world’s largest companies.

The documentary raises the question (among others), that such misdeeds are not simply due to the actions of a few bad actors. In fact, many of these same companies are still around (see Questionable Ownership), and continue certain immoral and unethical activities even with different people at the helm. Rather, the filmmakers suggest that it is the very nature of the corporation itself, as it is currently defined, that inclines industry to do bad.

The Modern Leviathan

If the corporation’s sole purpose is based upon an obligation to shareholders to maximize profit, does it not naturally follow that people and resources need to be exploited for maximum gain?  Despite being an immortal entity that is increasingly granted greater rights in society, a corporation has none of humanities’ morals and apprehensions – unless otherwise embedded.

Aligning Our Goals

This is where it is the opinion of your blogger that it is not the pursuit of profits itself that turns such corporations “bad” as they chase greedy ambitions, but a lack of other required metrics that would otherwise direct, check, and influence the decisions made by such corporations. If other metrics were included (see How Do We Measure The Impact?), such as people and the environment, then we can shift the corporate motivations.

For instance, if social and environmental gains were to be considered as crucial as financial objectives, then we would have greater alignment between society and corporations (see The Business Case). Such alignment could prove highly effective on limiting a corporation’s ability to do harm in the name of profit alone.

Finally, for corporations to run righteously, an effective governance is required to provide oversight and eventual liability. Good governance practices require, accountability, transparency, and independence. When these fail, the evidence pretty much speaks for itself. I highly encourage you to watch this when you can.