The voices calling for corporate reform are getting louder. “Corporate social responsibility is an oxymoron”, according to a recent book and documentary film “the Corporation” by law professor Joel Bakan. He says corporations are like amoral “psychopaths” - manipulative, incapable of being empathic or remorseful, and, while causing tremendous damage to the environment and other elements of the public interest, they refuse to take responsibility for their behavior. Harsh words, but they resonate with those uttered by critics of corporate power throughout history.
Corporations are powerful institutions. They do not serve humanity well when their pursuit of profits leads to strategies that degrade the environment, violate human rights and the dignity of employees, endanger public health and safety and otherwise undermine the welfare of communities.
People who run corporations are mostly decent human beings; many are pillars of their communities. They care about the environment and other people; they want to be recognized as good citizens. Corporate abuse of the public interest does not stem from flaws in the characters of corporate personnel; it stems from a flaw in the rules under which corporations operate.
State laws that create corporations promote behavior which managers and shareholders do not condone in their personal lives. Those laws encourage managers to act as if shareholders are psychopaths—concerned only that their company makes more and more money without regard for the human or environmental costs. They allow managers to excuse the damage they do by claiming they are only doing what the law requires - promoting the interests of shareholders.
There are 80 million shareholders in the US. It is absurd to presume that what they have in common is a desire to make money without regard for the public interest. Nonetheless, by conforming to laws that enshrine that faulty premise, good people in corporations (managers) make decisions on behalf of other good people (shareholders) that cause their institutions to engage in antisocial behavior.
Legislatures pass laws to control that behavior, but they are merely treating the symptoms of a problem while ignoring its underlying cause. A better solution, to prevent the problem from occurring in the first place, is to change the laws that create it.
People understand that doing well and doing good are not mutually exclusive. Shareholders are increasingly supporting stockholder resolutions that address issues of corporate responsibility, even when those resolutions support action that may not be in their short-term financial interest. More and more corporations are taking steps to protect the environment and to adopt policies that enrich the communities in which they operate. But these changes are slow, piecemeal and vulnerable to backsliding. We cannot afford to wait decades to deal with climate change and other serious threats while corporations come around voluntarily.
We can begin by asking state legislators to enact the Model Code for Corporate Citizenship, which would add the following sentence to the corporate law: “The pursuit of profits must not come at the expense of the environment, human rights, public health and safety, the dignity of employees or the welfare of communities”.
Those 28 words will create a new set of incentives and eliminate the excuse corporate managers now use to justify antisocial corporate behavior. By making it clear to everyone in the corporation that protection of the public interest comes before making money, corporations will evolve and operate in healthier and more holistic ways which truly reflect the values of those who own them and those who work for them.
Corporate Social Responsibility: Kick the Habit
By Jane Anne Morris
Spring 2000
Editors Note: Corporate managers have long used their own and government violence to repress dissent and keep people in line, to pollute civic aspirations for democracy and justice, and to enfeeble organized resistance and advocacy strategies. They have poured their shareholders’ money into manipulating public opinion in general and resisting activist opinion in particular.
During the 1960s and ‘70s popular critiques of corporate domination flourished. Citizen groups (and even many US senators and representatives), targeted, among others the International Telephone and Telegraph Corporation (ITT) for leading the attack against the elected Allende government in Chile; the Dow Chemical corporation for the production of the herbicide, agent orange, which the US Government spewed across Vietnam; General Motors—the largest corporation in the world—for its constant assaults upon life, liberty, democracy, and property; and, of course, the seven sister oil companies for pushing everybody around, everywhere.
Today, consciousness of corporate obstruction of democracy is again on the rise. This is a good moment to review corporate manipulation techniques—of language, ideas, and culture. In concert with general browbeating and relentless violations of workers, communities, and nature, these manipulations are sweeping the land with the help of the best opinion makers and shakers tax deductible corporate money can buy.
WHAT TO EXPECT NEXT from corporate sponsors of the WTO? There’s a well-thumbed page in the corporate playbook, ready to go. Whether or not it works depends on us.
The last time there was a scuffle as worrisome as the Seattle demonstrations,” Richard Milhous “Tricky Dick” Nixon was in the White House. Nearly everybody else was in the streets.
We were millions, and we demanded freedom, justice, equality, peace, clean air and water, and the right to choose our own hairstyles. We knew the joy of thinking it was all possible.
We also knew the raw fear wrought by the pop of tear gas canisters, the glint of sun on gunmetal, and the meltdown of a peaceable crowd being attacked by the forces of law and order.
But it is only at a distance of a quarter century that I begin to recognize the depths of another fear, just as visceral. As I pore over the writings by and about the corporate elite of that day, a simple fact stares out at me: they were scared witless.
While we wove our hopes into songs, and scrawled our demands onto placards, they spelled out their fears in journal articles and speeches at chambers of commerce.
The corporation was “under attack as never before,” subject to a “tidal wave” of “dissident groups, structured into onslaught vehicles of unrelenting social action,” according to corporate literature. The future looked “grim.” Corporations were about to “lose their autonomy, power and influence.” Some managers doubted that large corporations would even be “permitted” in the future. The significance of profit margins shrank as the CEO of one of the U.S.’s largest corporations wondered whether “the corporation as we know it...will survive into the next century.”
For those whose greed commanded the rudder of the ship of state, the sight of people in the streets—and not for shopping, mind you—was terrifying.
WHAT A DIFFERENCE a generation makes. Great corporations have more than survived the tumult of the Nixon era. Today, a tiny fraction of the human population, in its role as corporate managers, has been exceedingly successful in using the legal fiction of the corporation to expand its autonomy, power and influence. How did they accomplish this?
While we huddled in coffeehouses and church basements debating strategy, corporate managers plotted in boardrooms. Their diagnosis unfolded into a plan. From their perspective, a Great Danger threatened: government action spurred by public demands. A tried-and-true strategy beckoned: make a show of voluntarily Doing Something and publicize it shamelessly.
This was a strategy with a thousand faces: corporations as socially responsible, corporations as “citizens” with civic duties, corporations as “good neighbors,” corporate executives as “trustees” for the public interest, “business leaders” offering voluntary codes of conduct, and so on.
There were three pillars to the corporate plan. (1) placate; (2) co-opt; (3) reframe issues so that in the future, people would “demand” something that corporate managers want to “give.”
Corporate donations and other forms of “corporate social responsibility” pacified portions of the community by softening the edges of some of the most egregious and most visible corporate harms. In a quasi-behaviorist twist, they rewarded “good” behavior and disadvantaged “bad” behavior on the part of showcased community and charitable organizations. But most of all they enabled corporate managers to reshape public “questions” so that the “answers” were to come not from a self-governing people but from “corporate good citizens.”
Corporate executives were advised that they “should...be able to gauge with some accuracy the degree of social responsiveness that will satisfy the community....” They were warned: “If corporations fail to exert considerably more social initiative, they will be compelled to do so...” “The less voluntary social action U.S.companies take, the more it will be imposed by big government.” There were fears that public pressure would “compel legislative response.” (Heaven forbid that this should ever occur in a democracy.)
The beneficiaries of “corporate social responsibility” were selected for maximum effect. Corporate managers who lent financial support were well aware that they were “ingratiating themselves with recipients, or pacifying a pressuring public. A corporate gift can be a bribe, paid in return for a gadfly group’s promise to keep still and refrain from criticism of corporate policies.” On the other hand, “...some business givers have...withheld grants from groups identified with causes they consider to be too militant, or unfriendly to corporate interests.”
For some, the success of another round of “corporate social responsibility” was a foregone conclusion. “The social responsibility payoff has been attested to time and again. The most patent cost justification is a simple matter of good stickmanship—sidestepping the penalties of social irresponsibility.” The judicious distribution of corporate money “has allowed the managers to become brokers of social power, deciding which programs are supported and which are not.”
The language is vivid. “Bribe.” “Ingratiate.” “Satisfy the community.” “Payoff.” “Brokers of Social Power.” How much plainer can it get? In all cases, control was the goal; control not just of groups or movements, but of ideas and debates.
Coupled with brutal suppression, this three-step strategy—placate, co-opt, reframe debate—was used early and often. It worked after the sixties-seventies wave of public uproar; before that it worked in the 1950s; it worked during the Depression; it worked during the wave of “unrest” immediately after World War I. In the late 19th century, an early version of it worked after corporate strategists got a glimpse of the Knights of Labor and the Populists.
The notions of corporate trusteeship, the civic duty of a corporation, corporate citizenship, corporate social responsibility and the corporate social audit—all originated in the desire of corporate managers to thwart unionization, forestall revolt, avoid government action, and above all retain control by shaping public debate.
Each time corporate managers, hiding behind the increasingly powerful shield of the legal fiction of The Corporation, took another step toward becoming a more powerful “semi-autonomous managerial elite,” they cranked up the public relations machinery to boast of The Corporation’s deep concern and caring for the community. Increasingly, they doled out goodies—always on their terms. And in their terms.
So successfully have these terms become part of our political language that they often go unnoticed. Why is it, for instance, that when a government (using money collected for the public good) aids needy citizens, they’re on the dole, a supposed disgrace, but when corporate managers give away other people’s money to a soup kitchen, it’s philanthropy ? (Lah-dee-dah)
IF YOU DOUBT THAT corporate managers and not regular folks define the terms of public debate today, you might ask yourself these questions. Who defines free trade ? What about welfare reform ? Or those dubious twins, tree harvest and deer harvest ? Remember jobs-versus-environment , a golden oldie that never seems to fade away? These terms, and the terms of the debate, were all brought to us by corporate managers.
Corporate managers are willing and eager to participate in the democratic process, but only if they are in charge of it. When it comes to being subject to it, they balk, and are in fact willing to do anything, anything—even give away a little corporate money—in order to avoid losing control over the way issues are framed, thus becoming subject to the democratic process.
Corporate managers of the seventies warned their comrades that failure to act would have horrific consequences. “The alternatives are not attractive. The likeliest possibility is the wholesale substitution of public for private goals, strategies, and actions...”
The options were clear: either institute the three-point plan, or the country will succumb to...(I hope you’re sitting down)...a people’s democracy.
As night follows day, corporate managers experienced great surges of “corporate social responsibility” following each historic episode of social unrest. Such bouts of “corporate good citizenship” are voluntary, calculated, expedient, cheap and temporary. Far from reflecting democratic control, they frustrate it. Meaningless, unenforceable “side agreements” are not concessions to democracy on the part of corporate managers, but concessions to lack of democracy on the part of a not-sovereign people.
So it must be an especially sweet moment for corporate managers looking up from their Courvoisier-glazed snifters—to hear people clamoring for “corporate social responsibility,” that strategy-with-a-thousand-faces that has served to solidify the grip of the corporate elite through a century of citizen protests.
With the echoes of “WTO Week in Seattle” still rumbling in our ears, we have another opportunity to firmly reject the “corporate social responsibility” ruse. A small but growing core of people is demanding not goodies or favors or good deeds but real self-governance. They know that receiving goodies from worried corporate managers is the real “dole,” while a self-governing people controlling their community’s resources in the interest of society as a whole—that is democracy. (Lah-dee-dah)
Copyright 2000 by Jane Anne Morris
JAM is working on a book about these and related issues. She would like to thank Peter Kellman, J.M. Baime, Mary Zepernick and the POCLAD editorial board for comments on earlier versions of this article.
Endnotes:
1. John L. Paluszek, Will the Corporation Survive? Reston, Virginia: Reston Publishing Company,Inc./Prentice-Hall, 1977, p. 3.
2. David F. Linowes, The Corporate Conscience, NY: Hawthorn Books, Inc.,1974, p.14.
3. Linowes, p.43.
4. Barry Richman, “New Paths to Corporate Social Responsibility,” pp. 52-68 in Archie B. Carroll, ed., Managing Corporate Social Responsibility, Boston: Little, Brown and Company, 1977, pp. 53-54.
5. Paluszek, p. 18.
6. Paluszek, p. 3
7. Linowes, p.143.
8. Richman, p. 52.
9. Linowes, p. 9.
10. Melvin Anshen, ed., Managing the Socially Responsible Corporation, NY: Macmillan Publishing Co., Inc., 1974, p.15.
11. Jules Cohn, The Conscience of the Corporations: Business and Urban Affairs, 1967-70, Baltimore: The Johns Hopkins Press, 1974, p. 18.
12. Cohn, pp. 15-16.
13. Linowes, p. 43.
14. Robert Rutherford Smith, “Social Responsibility: A Term We Can Do Without,” pp. 31-36 in Robert L. Heilbroner and Paul London, eds., Corporate Social Policy: Selections from Business and Society Review, Reading, MA: Addison Wesley Publishing Company, 1975 (originally published in Business and Society Review, Spring 1974), p. 32.
15. Anshen, p. 16.
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