Corporation rights and legal protections

¶ … solving current corporate governance and the severe rights abuses that have led to countless victims, is that it is extremely hard to pinpoint who is responsible. Corporations are people, this is clearly defined through our interpretation of the 14th amendment, but corporations are not made up of one, or even a small group of people. Each corporation harbors hundreds, thousands and even hundreds of thousands of employees, managers, and executives. Therefore to blame on person, whether it be the CEO or CFO, for the ethics violations of a corporation is in most cases extremely unfair. It is precisely because there are no clear targets or specific problem areas to remedy that finding a strategic solution to current ethics debacle in the corporatocracy can be so hard. The below analysis will examine and discard inefficient and ineffective strategic options, and attempt to discover a clear, lucid and practical solution to modern corporate rights abuses.

When discussing the issue of corporate restrictions, most turn their heads to the government for guidance. Most people believe that only at the federal and Supreme Court level, can true policy reform affect corporations and change their entire perspective on rights abuses. The problem however, is that the federal government is highly ineffective in restricting corporations and checking their rights abuses. Federal laws, and Supreme Court rulings take years to formulate, and they only formulate as a result of reactive measures. In other words, the highest levels of the American government will only act, after an infringement by corporations occurs. An apt example comes in the case of the Enron and WorldCom scandal. Two of the world's most respected companies were found to have illegally misrepresented and falsified their financial statements. In the wake of this discovery, both of their stocks came to a crashing halt, and billions of dollars of investor money disappeared in the span of two weeks. In reaction to this catastrophic event, the federal government passed new protective measures called the Sarbanes-Oxley Bill, which required much stricter disclosure and monitoring of corporate finances. Although Sarbanes-Oxley may prevent future manipulation by corporations, it still cannot heal the wound caused by the Enron/WorldCom collapse. The federal government in the end will always be one step behind in its provision of protective policy. Since corporations are not restricted by these same barriers, they will always be one step ahead. It is evident that governmental intervention is not a completely valid solution to the dilemma of corporate rights infringement.

Another option that has become extremely popular is the reliance on grass-roots campaigning and NGOs (non-governmental organizations) to attempt an "outsider influence" on corporations. Various social groups and watchdog organizations have cropped up in the past two decades to attempt to rein in corporate abuse. The intrinsic problem with NGOs in general is that they lack significant leverage. Current globalization trends mean that both labor as well as consumer markets are no longer dictated by domestic forces. McDonald's for instance, made more profit from its international division than its domestic one for the first time in 2004, and this disparity has only risen since then. The American public at the grassroots level no longer has the leverage against corporate interests to use political posturing, and consumer protests to rein in corporate abuse. The increasing consumer market transition from domestic oriented corporations to transnational organizations has made this another ineffective avenue of corporate change.

The core issue within the discussion of reining corporate rights abuse is how to create a proactive plan rather than reactive. Instead, of running behind corporations, a strategy much run ahead and alongside corporations as they continue to grow and operate. The only way to obtain this kind of significant change implies that there must be a cooperative effort through all of the elements mentioned above to promote a change in "corporate culture." A unified strategy begins at the fundamental education level, students who will become the future corporate leaders and operators must be taught at an early age to have strong business ethics and values. The lack of such education is an essential cause for why corporate abuse is rampant in the world today. In 1980, a survey conducted USA Today asked Harvard Business School graduates what their top career priority was, an overwhelming 85% answered to "make money." This statistic is emblematic of the corporate culture for the past two decades. Changes within the education system to reinforce the importance of values at the collegiate and graduate level will have a profound impact on corporate leaders of the future. Evidence of this can be seen in another recent USA Today survey. When the same survey was presented to Harvard graduates in 2004, only 42% answered that money was their number one priority, while 28% said "having a positive impact on the world" as their primary goal. The current education system has begun to emphasize the importance of social awareness and public service as a strong element of corporate responsibility. As a result, students and future business leaders are becoming much more aware of business ethics and the responsibilities that they have towards the American public and consumers around the world.

Creating an infrastructure of corporate responsibility at an early learning stage is not easily accomplished. While most of the burden is upon the American education system to create a culture and curriculum that re-enforces this point, other institutions must work in cooperation as well. At the educational level, the federal government needs to increase their funding for education in corporate governance. This can be accomplished through the provision of grants and loans for public service and community oriented business students, or through community projects and research targeted on increasing corporate responsibility. At the local and municipal level, governments need to proactively recruit students to work within the community; the sum goal is to create a strong report between young business leaders and the community itself. More opportunities towards community service and government participation will increase the awareness of future corporate leaders to societal problems, and re-enforce a strong desire to initiate social change at a basic level. At the same time, social institutions and NGOs need to also recognize education as the only method to a long-term transition from corporate abuse towards corporate responsiveness.