Reforming the corporation?

My last post mentioned the US-based Democracy Collaborative, which advocates an economic program that it is possible to imagine being implemented. I think another route to the more cooperative economy they imagine would involve pushing, by a series of reforms over time, the current corporate system towards a more participatory model. The end would perhaps still be a cooperative economy embedded within community self-management, but the path would be through reforming what we already have, in particular the form of the corporation. One of the advantages of this route is that it would mean socially-conscious cooperatives would not have to constantly compete with corporations only working to the bottom line.

On the one hand the form of the corporation is clearly a difficult thing to change: we are immediately up against the most powerful interests in the world. On the other hand it is something of a weak link in the arguments of the neo-liberal status quo. There is nothing ‘natural’ about a corporation, since it is a governmentally mandated form, and they aren’t even fully beasts of the mythical free market, since they run themselves internally as vast authoritarian economies.

So corporations in their current form are vulnerable on the right’s ground as well as ground more familiar to the left: that changing corporations will increase our quality of life, increase equality, create more constructive relationships by allowing us to work together as equals, and increase our chances of survival as a species.

Nonetheless any battle to significantly change corporations will be as difficult as battles to democratise states, if not more so in our globalised world. I’ve come up with a list of possible reforms below – it is ordered according to the estimated difficulty in achieving them. Some reforms would be directed at internal culture and increasing confidence in self-management, some at the external effects of the corporation, and some at systemic effects. Not all the reform proposals are necessarily compatible with each other and the desirability of some may even be up for debate. Some may undermine the current functioning of capitalism, others may not.

Rather than being definitive (please do add any more you can think of) or a detailed description of options, this list is meant to highlight some achievable goals and also some more radical destinations that might be reached via many small steps:

Possible with lobbying:

1. Laws to improve ability to hold individuals or corporations – e.g. more enforceable corporate manslaughter laws
2. Compulsory social and environment impact assessments
3. Increased shareholder say in governance
4. Rotation of audit companies rather than just of personnel within a company

Possible with lobbying plus strong show of popular support:

1. Compulsory fully independent social and environment impact assessments, requiring regulation of the impact assessment industry
2. Mechanisms to make cross-border lawsuits/redress easier
3. Stricter anti-monopoly regulations with strict limits on % of industry that can be merged
4. Consultation with employees to be made mandatory
5. Strict liability by particular officers in corporation for specific things (already in place in UK in limited form with Money Laundering Reporting Officers)
6. Strong principle of liability for actions of subcontractors
7. Forbidding corporations or individuals acting for corporations from funding political parties
8. Corporate lobbying to be done in transparent manner, with every meeting and exchange to be documented
9. Corporations acting as public bodies due to outsourcing/privatisation to be subject to FOI
10. Limits on international resource transfer within the corporation or between subsidiaries
11. Strict limits on use of tax havens and shell or front companies
12. Enforceable international rules on controlling corporate behaviour
13. Limits on corporations holding stocks in other companies
14. All corporate records, not just accounts, to be open to an independent legal auditing body

Possible with help of strong grassroots movements:

1. Compulsory employee share ownership schemes, including among subcontractors
2. External, independent social and environmental input to board decisions, with potential for some veto powers
3. Specific corporate objectives beyond which the organisation is forbidden to act
4. Anti-monopoly bodies controlled democratically e.g. by citizens jury mechanism
5. Only organisations with primarily social goals allowed to operate in the ‘natural monopolies’
6. Corporations to have legally enforceable goals besides profit, including sustainability goals
7. Strict environmental liability laws, including for carbon emissions
8. Employees to have voting or veto powers in board decisions
9. Strict limits on corporation size
10. Repealing of international trade laws to allow protection of industries when playing field not level
11. Corporate lobbying limited to knowledge-sharing in transparent manner, other contact with government officials to be illegal or highly regulated
12. Democratic selection of company management by employees
13. Time-limited corporation licenses, with re-application to a democratic body needed every few years
14. Social investment banks with funding only available for corporations fulfilling certain objectives or criteria

Theoretically possible in a transformed political atmosphere:

1. All corporations converted into fully self-owned and self-managed cooperatives
2. Accountability to directly democratic local bodies wherever they operate – with the overseeing authority able to dissolve the organisation
3. Global minimum and maximum wages, PPP adjusted
4. All or most investment to be under social control