It is very likely that we do not need yet another contribution by a corporate law academic on ‘corporate purpose.’ Ever since the Business Roundtable’s 2019 intervention in that regard, the debate has been virulent, time consuming and – arguably – increasingly circular.
Similar arguments are being rehearsed and traded back and forth between what appear to be well-settled camps without there ever arriving this rare moment of epiphany and reciprocal understanding. Despite there being so much at stake – inequality is reaching new peaks and the planet is, undeniably, dying – what could be part of a larger, much needed societal introspection into our way of life instead becomes another opportunity for everyone to accuse the other of not understanding the nature of economics, financial markets and, even, freedom.
As we add the August 2019 date to our collection of CSR memorabilia, we are compelled to look at the long litany of lost battles, dead ends and rhetorical flourishings that line the road to … where exactly? Now and then, we lift our heads and allow ourselves to feel part of a bigger movement that might lead to collective action towards a more sustainable understanding and practice of financial instruments and corporate agency – for example when the IPCC serves up the hard numbers of environmental destruction or when the boss of one of the world’s biggest asset management companies, Larry Fink, reminds CEOs that “climate risk is investment risk”, or when a Dutch court orders Shell to dramatically reduce its carbon emissions. But then again, we are stunned – but not surprised – to see that grocery chains and fossil fuel companies (and their shareholders) cashed in big during the grain and oil shortages brought on by the Russian invasion of Ukraine.
We are living in a time of accelerated change and deepening polarization. The “glue” that holds modern, competitive societies together has become porose and everywhere searches are underway for new paradigms of future-oriented policy making, a more effective and more inclusive democratic culture and the – long overdue – eradication of at least the worst forms of exploitation and discrimination. The debate around ‘corporate purpose’, then, is neither new nor singular. Instead it directs our attention to the long trajectory from the raw state of Upton Sinclair’s “Jungle” (and, in the same year, the Supreme Court’s Lochner decision and its long shadows) through the heartened struggle for a redistributive welfare state on through the financialization of a globalizing economy up to the present moment. The challenge for us contemporaries is to put the finger on the right wound. In retrospect we will certainly know much better, whether we did choose and act correctly. But, in the moment, the noise seems deafening and the level of animosity and outright hostility that marks public discourse is debilitating. My new paper – The Corporation in an Age of Divisiveness – does not offer a ‘way out’ and even less spiritual apotheosis. It is, rather, driven by different experiences over the past years of teaching corporate law, law+artificial intelligence and current issues in business law. A striking moment was when we discussed the possible impact of Musk’s Twitter takeover and the temporary uncertainty regarding the platform’s actual survival. My students said they would ‘lose’ access to their daily news and crucial information, but at the same time were struggling to concretely name a single author whom they had been ‘following’ on that service. This and other instances during class discussions revealed to me a striking co-existence of our present-day exposure to ‘everything’ and our lack of connectedness to anything or anyone. Of course, that is not true in its entirety, as many of us continue to seek meaningful exchanges and collaborations.
But, even the bravest among us – and I am not brave – struggle with the weight of the misery around them, in the lives of those they know or those they learn about. This is not a time for “continuons” (‘let’s carry on’) but elections can still be won by ventilating such vacuous rhetoric – even more remarkable in light of said Province’s devastatingly high numbers in Covid deaths – particularly in those long-term care facilities that had been shifted to investor-owners in years before. And it is not the time to exhaust ourselves in tedious and never-ending argumentative flings where we replay the shareholder vs. stakeholder dualism of the 1990s rather than embark on a concrete anatomy of the by now deeply embedded financialized infrastructure that leads to old-age (in)security and makes climate change mitigation a bargaining token in today’s culture wars. The paper invites the reader to take a few minutes more to get away from the incessant and breathless avalanche of fighting words and to, instead, recapitulate the actual political steps that we have been taking on the way leading up to our current predicament. Recognizing these steps may remind us of the actual political choices we have today and that it is up to us not to waste them. That much we owe to those who have been denied even a fraction of the privileges we continue to enjoy.