28 October 2024
To avoid any conflict with shareholders, corporate managers and employees are required to leave their values at the door and maximise profits.
This fiduciary duty is an absolute legal priority, a singular and exclusive focus on their own self-interest that corporations only share with sociopaths. Joel Bakan’s The Corporation explains this really well, characterising corporations as externalising machines, displacing their costs onto the public as far as the law allows.
Corporations are the embodiment of the selfish, solitary creature of economic theory, writ large and now bestriding the Earth. Corporations have a legal identity and agency in the world that only individuals, associations and governments enjoyed – all free to act beyond selfishness.
Some corporations have used their agency to lie and endanger people in the pursuit of profit, from promoting mass addiction to risking mass extinction by denying climate change.
What could be more sociopathic? Yet we have normalised it. Not all corporations behave like sociopaths but those that behave well risk being undercut by those that don’t.
Let’s side with good businesses over bad ones by imposing sufficient transparency to tell them apart.
Corporations want to compete on a level playing field with predictable regulations and taxes. Beyond that, they adapt to the prevailing commercial environment and reporting requirements. A simple way to impose transparency on corporations would be a requirement to report all bank transactions, subject to human privacy and legitimate secrecy around research and development.
What do companies want to hide from their shareholders, employees and customers? Or from regulators and tax authorities? Let them, along with journalists, academics and interested citizens, follow the money, free to search out wrong doing. This is the Information Age, and information is cheap. Let’s empower good companies to behave well by exposing unfair competition and illegal practices.
As with any reporting requirement, companies will know more about each other’s activities, but transparency is generally efficient. The fundamentals of competition would not change, except for the unfair competition from companies hiding malpractice and driving good companies out of business.
We have populated our world with the kind of selfish neighbours nobody would choose, so it seems only wise to keep an eye on them. While we can create and destroy them at will, arguably corporations, not humans, now rule the world.
Corporate banking transparency would mark a fundamental redistribution of power from corporations back to people and their governments. The exponential rise in capital mobility has seen power flow the other way over decades and centuries. Transparency would deter or shed light on all manner of nefarious activities including tax evasion, organised crime, corruption, terrorism, and anyone hiding behind corporate anonymity.
As with the need to democratise the trade system and force human rights down the supply chain, this needs international action to avoid unfair competition from corporations hiding poor practice.
More broadly, our greatest impact is where we spend our money:
less money for the banks and more for us;
helping fellow democracies instead of funding dictators;
and supporting good businesses over bad ones.
This agenda for change raises far more money than it costs while helping to create a fairer, freer, greener world.