The Corporation
Reviewed by Peter Brokensha*I went to see the Canadian documentary The Corporation with corporate morality very much on my mind. The night before I had watched on the television news the immaculately groomed Meredith Hellicar, chairwoman of James Hardie, announce with an icy calm that matched her blonde locks that the disgraced chief executive Peter Macdonald had resigned taking with him severance pay of $8.8 million (35 times the average payout of $250,000 to dying asbestos victims). For good measure she added that James Hardie had no legal obligation to pay compensation to asbestos victims.
With my views (or prejudices?) about the power and immorality of corporations intact I was ready to have them reinforced by the film. I was not disappointed and as A. O. Scott in a review of the film for the New York Times pointed out the film depicts: "Corporate power is at once self-evident and elusive, mundane and esoteric, aggressive and insinuating. In the view of the filmmakers and most of their interview subjects, it is always bad and never to be trusted. The imperative to expand makes the corporation a fundamentally predatory being, gobbling up everything in its path — natural resources, populations of potential laborers and consumers, public spaces and private aspirations — without conscience or accountability".
This case is carefully built up mainly through full-screen talking-head statements by no less than 40 CEOs and toplevel executives from a range of industries — oil, pharmaceutical, computer, tyre, manufacturing, public relations, branding, advertising and undercover marketing; in addition, a Nobel prize-winning economist, the first management guru, a corporate spy, and a range of academics, critics, historians and thinkers.
The anti-social behaviour of major corporations, their invasion of many of the legitimate roles of government in a relentless drive for profit is well laid out but the film could give attention to the important questions about the underlying nature of corporations and their people.
The key question which was not explored is: Why do most corporations behave the way they do?
In the film, one executive Sam Gibara, chairman of Goodyear Tyre, gives a clue to this when he explains, "If you really had a free hand, if you really did what you wanted to do that suited your personal thoughts and your personal priorities, you’d act differently." The inference is that the very nature of corporations forces the people who run them to act the way they do. This view was forcefully expressed by Rev Harry Herbert, Uniting Church Investments in an SBS "Insight" debate on corporate ethics (2/11/04): "I think we're being very naive in this debate. We shouldn't treat companies, corporate entities, as our friends. We should be very suspicious of them. We should understand the wild animals that they are, and they might be governed by very decent Australians, but by their very nature they're dangerous and we should treat them as dangerous. We have to deal with them but we should stop being naive about them. The nature of them is to make a lot of money and to do it as quickly as they can, and we should treat them that way."
“ Very few people realise that it’s still the law that the shareholders must come first...”
A corporate response to these strong words was given by Bill Beerworth, lawyer and investment banker: "An important issue I think does relate to responsibility in what corporations can do. Very few people realise that it’s still the law that the shareholders must come first. There is no law that says you can take into account the stakeholder interests. In fact, if you go too far towards the stakeholders, that is, not shareholders, then you can be brought to account if you’re a company director. I think many corporations are now extremely concerned about ethical behaviour and being concerned about public attitudes. I think the law should be changed to allow corporations to take much better and broader account of stakeholder interests. The community, workers and so on, even governments, quite apart from shareholders."
Obviously the corporations law needs changing but real change will be difficult to accomplish in societies like America and where the economic and political climate is completely dominated by a free market profit-driven ethos.
The piece missing in this jigsaw puzzle is the lack of
realisation or accountability by corporate executives of
two fundamental propositions:
1. Corporations are social organisations who only exist
through the support and consent of all their
stakeholders; the physical, social and political
environment of the society and the community in
which they operate, their employees, their customers,
their suppliers and their shareholders.
2 In the long term a corporation will only be profitable
and financially viable if it is able to protect and
nurture the legitimate needs of all its stakeholders.
The key then lies in mobilising citizens as consumers and shareholders to change the attitudes of those who run the corporations. Apart from a small minority of bad apples who lie and cheat, that is HIH, Enron, corporate executives and managers generally share the hopefully generally ethical values of all of us but their training in business schools and within the corporations teaches them to blindly follow the path of the only one true corporate god, profit, and his disciple, tomorrow’s share price.
