In my mind, there are two versions of The Corporation.
One is a black-and-white version generated by childhood viewing of 1950’s and 1960’s television re-runs. In this version of the The Corporation, men go off to work every morning, wearing a hat and carrying a briefcase or a lunch pail.
In this version of Corporate America, the employees are smiling and salaries provide a living wage. The men who run The Corporation actually care about these workers that toil on its behalf day after day. It’s a paternalistic, distant caring, but a degree of caring all the same.
The other version of The Corporation grew in my imagination from a hundred real-life encounters during my work as a corporate executive benefits administrator and consultant. It has been fertilized by countless movies, television shows and anecdotes; this incarnation of The Corporation has assumed out-sized importance in the debates of the current moment, starring as the villain in the United States’ recent political dramas.
In this version of The Corporation, employees drag themselves to work in giant bee-hive call centers or big-box warehouse stores, hoping and praying that the indignities of the day will not result in the loss of their irreplaceable jobs. Meanwhile, corporate brass jet about the world, solidifying their citizenship in the global nation of the 1 %.
Of course, neither version is truth.
Work life in the 1950’s and 1960’s was no Utopia; women and minorities were trapped by a concrete ceiling. Safety and environmental protections were still developing. Computers and machines had not yet made work easier. However, wages did rise faster than the cost of living and many companies provided comprehensive benefits packages for all, not just for the top few executives.
Today’s companies are as varied as the people who make them up: some executives could care less about the economic havoc they wreak. Others go out of their way to make their communities a good place to live. Many workers toil at jobs they despise for much less than it would take to support their families; many others enjoy their work, contribute to society and make bold leaps forward in science, technology and thought.
What is true is that the corporate psyche, while never a match to either my childhood vision of a sanitized corporation or my current bête-noir vision of an corporation, has changed. Corporations have moved away from long-range planning; short-term gains rule the day driven by large market-maker shareholders like hedge funds and pension funds.
In this mad dash towards short-term focus, companies lost some of the fixtures that made up their social compact with workers. When I began work in the executive benefits industry, for example, most firms marketed and sold high-dollar executive compensation plans and managed and administered employee qualified retirement plans, or pension plans. By the time I left the business in 2002, there was so little private pension planadministration business left that it hardly qualified as a footnote to my firm’s overall business strategy.
This shift was accelerated by a legal climate that began to officially recognize the shareholder as the sole party for The Corporation to satisfy. As shareholders ceased to be employees and community members and became hedge funds and Saudi royals- with huge percentages of ownership often accumulated under just a few shareholding entities- the drive to produce the right quarterly balance sheet results and the right daily stock price overshadowed many other concerns, such as how a corporation operates as a citizen within a community.
But possibly, for a small number of companies at least, that is beginning to change.
Several states have approved a new type of corporation, called a Benefit Corporation; when California companies were given the ability to convert to Benefit Corporation status this month, Patagonia, among others, was lined up at the courthouse doors, paperwork at the ready, to become a B-Corp.
Benefit Corporations are companies whose stated objectives include meeting certain cause-related goals as well as making a profit. The reason that they require a specific corporate designation in order to do this goes back to the shareholder satisfaction requirements for a regular corporation. If leaders of a regular corporation decide to donate money, resources or time to a cause rather than to record them on the books as profit, shareholders can sue, and win. By becoming a Benefit Corporation, companies are putting future shareholders on notice that their goals and dreams include more than just turning a nickel. (Current shareholders have to vote to allow the new corporate designation before a company can make the switch.)
And if doing the right thing isn’t enough of an enticement for most companies to convert to Benefit Corporations, perhaps the marketing value of altruism will encourage companies to do more and to give more. Even Wal-Mart and Goldman Sachs, the dual personification of corporate evil in the 21st century, have recognized that beneficence has some benefit to their beloved shareholders’ bottom line.
After all, as a social paradigm, “greed is good” only works if more than a handful of people are able to avail themselves of the fruits of their greed.