Future of the Corporation

Posted on November 13, 2007 by Dave Pollard

I‘m in Boston at a conference called Future of the Corporation. The issue of corporate social and environmental responsibility and sustainability is part of my mandate in my new job, so this trip was both personal and business for me.One of the speakers was David Korten, author of When Corporations Rule the World. Like me, Korten seems to vacillate between optimism and pessimism of the issue of corporate reform. He lamented that overconsumption and overpopulation were essential to unsustainable corporate success, and were fueling their power, and said corporate charters needed to change from a focus on private advantage to public responsibility. I spoke to him briefly at the cocktail reception, and he seems to have been co-opted into the prevailing worldview of US progressives that corporatism and its abuses can be reined in with sufficient collective citizen will. Though perhaps as a professor he has no choice — it may be just a brave public face.

The dinner speaker was Robert Kuttner, founder of American Prospect and a Boston Globe columnist. He confirmed my thinking about the vulnerability of the US dollar and the excesses of the deregulated financial markets. His position is well articulated in this article. Other interesting speakers included:

Craig Cohon of Globalegacy, which uses funds from big corporations to launch startups in struggling nations, and who tried to convince us that Generation Millennium has what it takes to fix what we’ve screwed up, and that business leaders had power to make change but were fearful to use it;
Henry Mintzberg, the Canadian management science guru, who called (in Boston) for “a new Tea Party”, saying that corporations are incapable of solving our major social problems and that they should be reined in, deprived of ‘personhood’ rights and refocused on the one thing they do well (efficient resource allocation);
Damon Silvers of the AFL-CIO urged re-regulation of corporations to force them to disclose and accept costs that are currently externalized (pushed off to the taxpayer, the environment, other countries and future generations), and relearning to practice the vocation of management as a priority-balancing art (he’s one of many, many Americans who think ‘leadership’ is the problem and solution behind many of these challenges, which regular readers know I disagree with);
One of the attendees made an impassioned plea to recognize that government is now so weak that it cannot be expected to act to rein in corporatism or any of its consequences, and that citizens need to step in;
Michael Marx of Corporate Ethics International referred us to their website’s Corporate Strategic Initiative report calling for putting corporations back into the service of people, changing the market system through incentives and rewards in the public interest, and restoration of the public commons.

I also especially enjoyed conversations with John Elkington of SustainAbility, Andrea Moffat and Anne Kelly of Ceres, Majorie Kelly of Tellus Institute (event organizers), Christine Moore of Austria’s Credo organization, and Marc Le Menestrel of U Barcelona. As usual, the most value from the conference came from corridor and unscheduled discussions. Peter Senge co-hosted the meeting, but did not present; there was no mention of Presence at this session, nor were its principles particularly evident in Peter’s facilitation.

Highlight of the event, as I expected, was the opening address by Charles Handy (pictured above), whose writing has been so instrumental to my thinking about natural entrepreneurship. His comments focused on three main themes:

Nobody willingly gives up power: You need regulation, taxes, enforcement, rewards and mobilization of people to force a power shift;
Modern capitalism is profoundly anti-democratic: Its single goal is to increase consumption and the number of consumers, and the one-vote-per-share system and emergency of oligopoly are anathema to social equality, truly ‘free’ markets and longer-term thinking; and
Most problems are the result of great ideas with unintended consequences: Most people in corporations really mean well, and it’s the corporatist political and economic system (rather than extreme greed) that produces irresponsible and unsustainable behaviours, decisions and ‘short-termism’.

He was telling us, I think, to be aware of these realities and not be idealistic in understanding the challenges of achieving change (and the impossibility of ‘imposing’ it), and the importance of creating a level playing field to encourage corporations to self-reform without fearing competitive disadvantage when doing so.

I had the chance to give him the outline and set-up chapter of my upcoming book, so perhaps you’ll see his name on my book-jacket.

I don’t think many of the presenters and attendees really ‘got’ Handy’s points, which was a shame. There’s a terrible propensity I’ve noticed among US progressives to reassure each other instead of admitting how serious a problem is, to mistake consensus for action, and to overrely on the emergence of some ‘leader’ to take America out of the darkness of corporatism, conservatism, and irresponsibility. The non-US people I spoke to almost all seemed to note this, and felt the result was unwarranted optimism and a lack of substantial intention to actually do anything.

Notwithstanding that, it was a great networking event, and attracted an extraordinary mix of very bright and thoughtfulindividuals. Brain candy, and great promise.

Category: Corporatism

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7 Responses to Future of the Corporation

Doug Alder says:

November 15, 2007 at 10:43

All noble ideas Dave but corporations now determine who does and does not get elected and as throttling their power requires action by elected officials it just ain’t going to happen no matter how many angry citizens there are.
Nathan says:

November 16, 2007 at 08:02

Because I have much sympathy with the anarchist viewpoint, I think that:”Nobody willingly gives up power: You need regulation, taxes, enforcement, rewards and mobilization of people to force a power shift”Is simply logically incoherent. You need power for regulation, taxes and enforcement, and the power of government is in service of large corporations – this is just the way it is, and no amount of reform can change human nature with relation to power.Government is not weak, it just has never really been serving most people in its current form – democracy becomes little more than a legitimizing ideology when used on top of a gigantic centralized authority.Corporations are anti-democratic as they concentrate influence into small groups of people, who have the power to influence the small number of people who are given too much power by a meaningless electoral process.This isn’t being cynical, there just doesn’t seem to be any point in hoping to change the world by attempting to influence a corrupt and degenerate political system that is increasingly golbalised.
Nathan says:

November 16, 2007 at 08:03

Because I have much sympathy with the anarchist viewpoint, I think that:”Nobody willingly gives up power: You need regulation, taxes, enforcement, rewards and mobilization of people to force a power shift”Is simply logically incoherent. You need power for regulation, taxes and enforcement, and the power of government is in service of large corporations – this is just the way it is, and no amount of reform can change human nature with relation to power.Government is not weak, it just has never really been serving most people in its current form – democracy becomes little more than a legitimizing ideology when used on top of a gigantic centralized authority.Corporations are anti-democratic as they concentrate influence into small groups of people, who have the power to influence the small number of people who are given too much power by a meaningless electoral process.This isn’t being cynical, there just doesn’t seem to be any point in hoping to change the world by attempting to influence a corrupt and degenerate political system that is increasingly globalised.
Nathan says:

November 16, 2007 at 08:03

oops, too late to correct that typo…
Steve says:

November 16, 2007 at 15:54

DaveOn a lighter note, I shared the pleasure of seeing Charles Handy speak (along with Tom Peters) at a seminar in Manchester, UK last year and I found his thoughts and insights on the evolution of organisations and society compelling – plus he came across as such a delightful and well-meaning gentleman.Glad you enjoyed seeing and listening to him too.Steve
Vladimir Dzhuvinov says:

November 18, 2007 at 02:09

The future of the corporation?Being dissatisfied with the present state I tried to imagine a better future for the corporation — what would be great to have and what would make economic sense. Then I began to realise that there is only one natural direction corporations can evolve — becoming more like the free market. Moreover, I realised they are already moving along this path.What will be the defining feature of this future corporation? Perhaps that employees will be free to transact with one another, in money (or other) terms, in order to obtain from their colleagues the required inputs for their job and then to earn from what they produced/provided to others. These direct, more personal and natural relations will come to replace the traditional compartmentalised systems for management, control and remuneration that we know from today’s corporations.Now, I don’t call this the “natural enterprise”, I have a different name, but this actually doesn’t matter. What matters is that over time people tend to choose social systems with greater degree of (economic) freedom and expression, so enterprises are guaranteed to move in that direction. So, we shouldn’t worry too much about our future :)
Jon Husband says:

November 18, 2007 at 16:34

What will be the defining feature of this future corporation? Perhaps that employees will be free to transact with one another, in money (or other) terms, in order to obtain from their colleagues the required inputs for their job and then to earn from what they produced/provided to others. These direct, more personal and natural relations will come to replace the traditional compartmentalised systems for management, control and remuneration that we know from today’s corporations.This “behaviour” and configuration(s) of negotiation-between-acors are increasingly seen in on-purpose networks, and are a key element or aspect of what I call “wirearchy”.