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DISPATCH: Boardroom Murder
Posted on September 22, 2005 by Anita Roddick

Oh dear! Oh dear! After reading this posting on the Sierra Club website, I am feeling starved for good corporate words, deeds and most important of all, actions. Please, please, please send me, via the comments facility, any examples of what you have experienced that makes you a tad more optimistic about the positive change in corporate behaviour.


By Chris Warren

In April 2003, a group assembled outside the capitol in Richmond, Virginia, to celebrate the chartering of a new tobacco company: Licensed to Kill Incorporated. Cofounder Robert Hinkley bluntly declared the company's purpose: to manufacture and market its products in a way that "generates profits for investors while each year killing over 400,000 Americans and more than 4.5 million other people worldwide."

Licensed to Kill (motto: "We're rich, you're dead!") was formed as a stunt but with the serious goal of demonstrating how states sanction and protect corporations, even those dedicated to making money at the expense of public health and the environment. "We told the Commonwealth of Virginia that we were going to kill people," says Hinkley, a corporate attorney. "To their credit, they didn't want to set this company up, but there was nothing they could do about it."

Obtaining a corporate charter in Virginia, and most other states, is as easy as filling out a short form and paying a modest fee. Only if it planned to break the law would a company not receive a charter. (Despite its name, Licensed to Kill wasn't illegal: The tobacco company merely had the audacity to plainly state its products' effects.) But then again, applicants don't usually even have to list the purpose of their business.

Once chartered, corporations are granted a long list of benefits under state and federal law, including the ability to exist forever (there's no expiration date for charters) and the right to influence elections and shape legislation through campaign contributions. Additionally, their shareholders and directors are shielded by limited liability. Meant to encourage investment in business ventures by ensuring that an individual's assets cannot be seized by creditors if a company fails, limited liability also insulates stockholders and directors, in most cases, from personal responsibility for the company's potential debts or even misdeeds.

Many of these rights stem from a series of court decisions over the past 120 years that have, in effect, established corporations as legal "persons"—often powerful ones with little accountability to society. Their widely accepted purpose is simple: to maximize return to shareholders. (This does not, of course, apply to not-for-profit corporations like churches, schools, and charities.)

Thus it has been for at least a century. Professor Jesse Choper, an expert on constitutional and corporate law at the University of California at Berkeley, points to a 1919 case in which automaker Henry Ford was sued by his shareholders for proposing to sell his cars at a below-market price. Ford said he wanted to do it to create more jobs, thereby "spreading the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes", but the Michigan Supreme Court ruled in favor of the shareholders. Later cases in other states have broadened corporations' ability to contribute to public welfare but generally followed the Michigan court's opinion that business should be conducted "primarily for the profit of the stockholders."

Obligations to workers, customers, the environment, or the communities in which a company operates generally take a backseat, if they are considered at all. "Nothing in its legal makeup limits what (the corporation) can do to others in pursuit of its selfish ends," writes Joel Bakan, a law professor at the University of British Columbia and author of The Corporation: The Pathological Pursuit of Profit and Power. Indeed, "it is compelled to cause harm when the benefits of doing so outweigh the costs."

Extracted from the Sierra Club website.

Topic : Corporate Greed
Posted By : Anita Roddick
Posted On : September 22, 2005



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2 results found

Re : Boardroom Murder
By Karen Thompson on September 27, 2005

"good corporate words, deeds and most important of all, actions." Yep, now there is something like a contradiction in terms. I think this exercise perfectly demonstrates the priorties of the world as it stands at the moment (imo). Completely money driven to the point that nothing else matters. How do we start educating people that money (profits) isn't and shouldn't be the main drive of life? "The Pathological Pursuit of Profit and Power" maybe it is this ideology that needs to be addressed at a base level - starting at school?? just my two cents!!

Re : Boardroom Murder
By Marisol Ward on September 26, 2005

It is sad to see that the world that we dreamed of as children is nothing more than a fairy tale. Our lives now are dominated by corporate greed and profitt margins. When we look around, do we see beautiful humans with shinny souls or walking currencies? I guess there will always be light and dark, it is up to us to pick a side and fight as hard as we can to change things. The moment we stop, the fairy tale is completely over.


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