Op Ed: Crucial Corporate-Governance Principles and Practices Undergoing 21st-Century Change

Boston’s International Summit Sets Needs in Deep Perspective.

Image courtesy: ameinfo.com

(BEND, Ore.) - The most-essential foundation-format for all corporations is itself now under 21st Century examination. Many broadly-defined changes are now being detailed in depth, under further-developed principles built anew, from scratch.

Highly-qualified professionals from civil society, law, labor, and government are taking full-bore interest and leadership roles. Good-faith participation is already under way from world-leaders active in current corporate management.

Proof of this new pudding is being generated by practical in-the-market means applied by full-scale open market corporations with the new controlling patterns and practical management changes. They are producing fully acceptable margins-of-profit, while reflecting full concern and strong consideration for stakeholders and communities.

Strong, continuing, practical motivation is now coming from corporate leadership itself, recognizing once again the inevitable consequences of current public opinion, heavily documented by the multiplying books, studies, reports now published; as well as the overwhelming interest now demonstrated by renewed governance applications occurring everywhere.

Worldwide multiplying events are now reflecting the worst view of corporate activities since the Golden Age and the New Deal era, where and when the Corporate Social Responsibilities movement was initiated.

Business cycles themselves are well-known to be repetitive; it is proving to be precisely the same for necessities reflected in the CSR movements worldwide, building on prior development now driven and strongly accentuated by 21st Century demands.

After three years of extensive, deep-probing examination via a whole series of studies, cooperative working meetings, surveys, and other means-and-measures, the very core-principle shaping that inexorable drive for profits is being reversed --restoring public interest primacy.

These are results reported from the just-completed Summit on The Future of the Corporation in The 21st Century, held in historic Faneuil Hall in Boston --site of historic sessions leading up to the American Revolution.

Presentations were made by an outstanding group panelists, and moderators, including: Arie de Geus, formerly of Royal Dutch Shell; John Elkington, founder and chief entrepreneur, Sustainability; David Korten, author; Mindy Luber, Ceres; Darcy Winslow, Nike.

(Reader’s Note contains access information for Summit materials available, including the basic “Corporate Design: Missing Business and Public Policy Issue of Our Times”.)

Summit results and continuing strong interest worldwide from corporate, governance and civil institutions and organizations stresses the overall importance of this first such comprehensive examination of corporate-format change now obvious in early years of the 21st Century.

We MUST never lose sight of the foundation-fact concerning corporate control and governance: “Corporate structure was originally conceived to satisfy very deep concerns connected directly with the public interest.”

Originally the corporation-format, combining capital access and efficient organization, “was created by State action to strengthen business ability to fulfill that public interest.”

Corporate formats were long “closely controlled as essentially demanded State responsibility, as they proved effective and efficient,” generating profits for capital/risk-takers while STILL serving the public interests.

Corporate continuance was allowed by State edict permitting protracted corporate-life and operations for that original purpose: “to serve the public interest.”

“There was little hesitation to end any corporate charter when seen to threaten that most essential component: the public interest.”

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National and State-level charter-granting - with full-control via determined surveillance and regulation continued for decades.

That practical situation was eroded in the Railroad Era via concentrated corporate attack - usually well lubricated by money, designed to deny protection of public interest superseded through charter changes “installing profit pursuit as the only legal corporate concern.”

Overall results, hastened by explosive growth of corporate formats building strong business expansion internationally, are now inevitably visible.

The worldwide consequences are increasingly painful to millions, too, especially in developing nations now overwhelmed by corporate pursuit of low-cost labor.

Corporate charters have long stated the legal obligation to “pursue the interests of the corporation” at all times. That inevitably promotes and strengthens relentless pursuit of profit, with no interest whatsoever in consequences to other stake-holders than ostensible shareholders, often isolated and misinformed by management.

The public interest is conveniently completely overlooked - the end-result of 300 years of business effort to modify and manipulate the original format.

That overwhelming “always-on” drive “for profit first, last, and all-of-the-time” now distorts and perverts original intent.

We’ve permitted “manipulation into massively full-scale profit-only operations by the impacts of merger, conglomeration, and, eventually, corporate campaign contributions”; even distorting and perverting the American Constitution and Bill of Rights.

In turn, that deplorable degradation of common laws accumulated over two centuries now permits still further manipulation at many levels, leading to malign impacts of “deregulation”, “privatization” and eventually to “globalization.” “Corporate person-hood” is the comprehensive tool now taking a tremendous toll in this nation and across the world.

Obtained by decades of determined effort in the Railroad Era, by proven-erroneous Supreme Court falsified “precedent”, it now still permits obviously-perverted application of Constitutional individual-rights, Manipulation and distortion of worldwide agreements inevitably follows, as treaty and trade obligations in protection of corporate property and operations.

The brute fact remains that those governance institutions can still control, shape, manage, regulate, and direct corporate life and function wherever they now exist, despite overwhelming current information indicating strong worldwide conglomeration and combination of currently-existing corporations into government-dominating, apparently "untouchable institutions”.

That is still true, no matter how well-protected current corporate formats may become by huge cash-flow, with heavy-dollar impacts to manipulate corporate-governance management at every level.

We must remember the most subversive truth of all, that corporations are our creations. “They have no lives, no powers, and no capacities beyond what we, through our governments,give them,” states Joel Bakan, an internationally-renowned legal scholar.

The second Op Ed in this series will present and discuss the Principles of Corporate Redesign presented and further developed at the Summit.

Here are the six Principles headlined:

Principle 1: The purpose of the corporation is to harness private interests to serve the public interest.

Principle 2: Corporations shall accrue fair returns for shareholders. but not at the expense of the legitimate interests of other stakeholders.

Principle 3: Corporations shall operate sustainably, meeting the needs of the present generation without compromising the ability of future generations to meet their needs.

Principle 4: Corporations shall distribute their wealth equitably among those who contribute to the creation of that wealth.

Principle 5: Corporations shall be governed in a manner that is participatory, transparent, ethical, and accountable.

Principle 6: Corporations shall not infringe on the rights of natural persons to govern themselves, nor infringe on other universal human rights.

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Reader’s Note:

For direct access to the Summit series of special reports and many background references, contact: info@corporation2020.org, or visit corporation 2020.org.

For previous image-and-issue information shaping this CSR-issue, see Op Ed: June 23, 07; headlined: “Corporate Stake-holders Demanding Full-Expansion Of Social Responsibility Reshaping Oregon Business Ethic”, available at S-N Staff archiive for HCR writings.

Quotes are shortened, summarized, combined from original verbatim for space-demands here. All are available in verbatim by request.

The seminal quote by Joel Bakan is from his acclaimed book “The CORPORATION: Pathological Pursuit of Profit and Power”; ISBN 0-7432-4746-9

Major authoritative books documenting statements and points made here in number 24, too much for inclusion here; list available on request to editor. The HCR-file on CSR, initiated in the ‘70s, contains nearly 700 items.

Other extensive documentation is available on request with full ID to editor, subject to possible copyright restrictions.