The Corporation: The Pathological Pursuit of Profit and Power

[Thomas II]

This is interesting...

 

[Colonel Sanders]

Corporations weren't meant to become so powerful. The concept of protection from personal liability is what spurned entrepreneurial innovation and we have all benefitted from it tremendously. Without liability protection, the number of risks that have been undertaken would not have been and the Western world would look very different than it does today.

And to this day, there is no legal doctrine that says that a board of directors is so strictly beholden to shareholders that it must strictly pursue profits to please them. But of course, that is what major public corporations have become, and that's an important distinction to make. Most corporations are not publicly held. Neither are most LLPs, LLCs, S or C corporations. But that doesn't prevent those corporations from doing everything they can to maximize their profits at the cost of everyone and everything else. So publicly held corporations are not by necessity more destructive than any other entity.

The fact is that the profit motive works. But problems occur when the profits of one begin to damage the quality of life to others that are not competing in a given business. For example, when Corporation A begins dumping toxic shit upstream from where we get our drinking water so it can compete more successfully against Corporation B, by not disposing of its waste responsibly, it becomes a problem. And compounding that problem is the concept of the greatest profit possible combined with the perverted idea that capitalism = freedom, and so by restricting capitalism, tyranny isn't far behind. But that's where we sit as of now, and only through responsible and reasonable government regulation can we hope to change it.

It's actually incorrect that a corporation protects anyone from personal liability. If you are a shareholder and you directly break a law, there is no immunity.

I didn't say that shareholders are protected from liability. However, controlling shareholders may be liable for certain actions that I won't go into.

Further, corporations do protect officers and directors from personal liability for their decisions. This is such common knowledge it's surprising that you don't know it.

Finally, one is always held responsible for their tortious acts.

 

[Harry Bosch]

It's actually incorrect that a corporation protects anyone from personal liability. If you are a shareholder and you directly break a law, there is no immunity.

I didn't say that shareholders are protected from liability. However, controlling shareholders may be liable for certain actions that I won't go into.

Further, corporations do protect officers and directors from personal liability for their decisions. This is such common knowledge it's surprising that you don't know it.

Finally, one is always held responsible for their tortious acts.

This is a big misunderstanding. Corporations do not protect officers and directors from personal liability for their decisions. If an officer authorizes, directs or participates in wrongful conduct - you can be held liable. Believe me, I've started two companies. I know the law pretty well in this regard.

 

[Colonel Sanders]

I didn't say that shareholders are protected from liability. However, controlling shareholders may be liable for certain actions that I won't go into.

Further, corporations do protect officers and directors from personal liability for their decisions. This is such common knowledge it's surprising that you don't know it.

Finally, one is always held responsible for their tortious acts.

This is a big misunderstanding. Corporations do not protect officers and directors from personal liability for their decisions. If an officer authorizes, directs or participates in wrongful conduct - you can be held liable. Believe me, I've started two companies. I know the law pretty well in this regard.

Okay.

 

[barbos]

I didn't say that shareholders are protected from liability. However, controlling shareholders may be liable for certain actions that I won't go into.

Further, corporations do protect officers and directors from personal liability for their decisions. This is such common knowledge it's surprising that you don't know it.

Finally, one is always held responsible for their tortious acts.

This is a big misunderstanding. Corporations do not protect officers and directors from personal liability for their decisions. If an officer authorizes, directs or participates in wrongful conduct - you can be held liable. Believe me, I've started two companies. I know the law pretty well in this regard.

My understanding is that they are not financially liable for losses due to bad (but legal) decisions.
You can't make them pay their own money. That's main difference between corporation and private business.

 

[Will Wiley]

I invest in corporations. I have 10 members in my household that I support and I'd like to retire someday. Therefore, I invest in companies that offer the highest return. They are usually very well managed. Most well managed companies treat their employees well. But a company that doesn't look after my interests well will lose my investment.

Even if they destroy the environment for your grandchildren

 

[scombrid]

Again, a coporation that harms the environment will lose shareholder value.

Only if there is a third party with the power to levy fines or other penalties/coercions. Otherwise corporations maximize shareholder value by externalizing as much cost as possible. As long as the pollution isn't being dumped in the consumers' living rooms then the consumer price pressure encourages pollution by producers. The average consumer will buy the lower priced product irrespective of that consumer's stated opinion on the environment. This is especially true when the pollution is remote to the consumer and/or the pollution does not cause immediate acute devastation.

But why should corporations be charged with directly protecting the environment?

They shouldn't obviously.

I expect McDonalds to adhere to federal environmental rules and make hamburgers.

And this is necessary because corporations are amoral and have to have a third party force them to not wreck the commons or exploit labor.

 

[ronburgundy]

The biggest return is in not caring about the environment.

There is no monetary return in caring. There is only expense.

Again, a coporation that harms the environment will lose shareholder value.

Completely untrue. 99.9% of the things a corporation can do to harm the environment are things that reduce their own costs of production, distribution, and other forms of operataions. Thus, the direct and short term impact of harming the environment is almost always a profit increase, and thus increase in shareholder value. Very rarely are corporations caught and held accountable (by law or consumers) for harm they do to the environment.

Also, the larger the company, the more widgets they are producing and thus the more net gain from cost cutting harm to the environment, and the more legal and market power they have to limit the repercussions of getting caught. Thus, the bigger the company, the more profit they make from harming the environment. The larger corporations have full time employees who crunch the numbers to determine when harming the environment, consumers, and the public in general is a net loss versus when the litigation is just worthwhile "cost of doing business". Large companies will not recall a dangerous or even deadly product unless their lawyers and accountants tell them that the litigation will cost them more than the cost of the recall.

But why should corporations be charged with directly protecting the environment? Do you expect police departments to care for the environment? How about libruaries?

Most corporations that produce products from raw materials, and/or distribute products non-locally are engaged in activities that inherently harm the environment. IT isn't about them protecting the environment from others, but minimizing the inherent damage that their defining activities result in. Minimizing damage almost always costs the company more money. It is much cheaper to dump toxic waste in a river than pay to have it properly sealed and stored. In fact, with large corporations, they often also own the toxic waste clean up companies, and the medical centers to treat the cancers caused by the waste, etc.. IOW, the polluting of one company creates business for other companies under the same umbrella corporation. So once again, the larger the corporation, the greater it profits from harmful unethical actions.

Major corporations only choose to minimize the damage they do to the environment if getting caught for not doing so is more expensive than all the money they save by doing it the cheaper and more destructive way. Given how hard the GOP has made it to sue corporations, it is almost always more profitable to go the route of fucking over the environment and paying lawyers to minimize any liability.

BTW, the same logic applies to how corporations treat their employees and customers. It is purely a numbers game. Their are infinite ways they can cut costs and increase profits by fucking over employees and consumers. With many of those ways, those who get fucked either don't know or don't have the power to do anything about it, so their is minimal risk of costly response.
They have people on staff whose job is to determine whether fucking over employees and customers with X policy will be a net profit gain or loss, and if the former, they do it.
They do not pay anyone to actually have or apply ethics, only to determine how perceptions of ethics will impact their bottom line.