The Business of Human Rights

With the introduction of Benefit Corporation legislation across America, the business world might want to brace for change. In December of 2012, the DC Council became most recent body to pass legislation allowing for the existence of Benefit Corporations as an alternative and innovative corporate form. The DC Council joined twelve states which passed similar legislation in the past two years and fourteen more states (including our own state of West Virginia) which are currently working on passing similar bills. This quickly emerging legislation recognizes the growing desire of some entrepreneurs and businesses to not only earn profits but also impact communities and the world at large in a positive way.

What exactly is a B Corp?

Some consider B Corps a kind of meshing of the for-profit corporation and the non-profit corporation.A B Corp commits itself to benefiting society, the environment, its workers, its community, and/or some other specific cause while still pursuing a positive bottom line. Some people say that B corps have a triple bottom line: people, planet, profit. The B Corps represents a new form of corporate entity that allows boards of directors to make decisions based on interests other than pure profit-maximization without the threat of litigation from shareholders. B Corps do not have the advantage of tax exemption like non-profits, and they are held accountable to their stated public-benefit commitment by an independent, third-party standard. In its certificate of incorporation, a B Corp must identify that it was formed to create a material positive impact on society. Basically, a B Corp is a form of incorporation which allows for stakeholder consideration along with that of the shareholders. Generally, B corps serve dual purposes. They not only intend to make money, but also to make a positive impact on the world around them.

If you have a chance, the article is definitely worth a read.The full article can be viewed here.

In their 2004 documentary The Corporation, Mark Achbar, Jennifer Abbott and author Joel Bakan delve into the ascent, characteristics, and downfalls of one of the most pervasive entities of the modern era: the corporation. The Corporation focuses on “corporations” and “corporatism” as a whole rather than dissecting any particular, singular business behemoth. In doing this, the film makers coerce viewers to think about the entirety of the issues associated with corporations rather than allowing us to point fingers at a single scapegoat. This film features an all-star list of contemporary political and economic thinkers such as Noam Chomsky, Michael Moore, Naomi Klein, and Milton Friedman whose commentaries intersperse with representatives from the corporate world. With the help from these folks inspired dialogue, the film weaves through a bevy of hefty topics such as pollution, sweat shops, privatization of natural resources, sustainable production methods, manipulative advertising to children, corporations’ effects on the biosphere, etc.

In the mid-1800s, corporations were recognized as individuals in the legal system in the United States. This recognition gave them unprecedented rights and powers. Because corporations are thought of as individuals, one might wonder what kind of an individual would an entity be who has no feelings or central nervous system or an actual body. This is exactly the question that these filmmakers tackle in this two and a half hour film. The documentary uses psychiatric and psychological standards to determine that if corporations were actual individuals, they would be considered psychopaths. Everything from selfish decision making to lack of regret to unrealistic thought patterns points to psychopathic tendencies that are common amongst corporations.

The Corporation has not only great breadth of topics, but also great depth. The film pinpoints specific instances of corporate ills. For example, featured throughout the film is the Bolivian workers’ struggle to regain rights to their water after a corporate privatization. Also, the film features an in depth story of investigative reporters from Fox News who got fired for refusing to disperse false information about Monsanto’s dairy cow antibiotics that were known to cause harm in humans. And, we also hear from an advertising firm who is willing to market to kids at all costs. The film succeeds in painting the modern corporation as a psychopath because is shows the lengths at which corporations will go to serve themselves above all else. The Corporation makes real the utter pervasiveness of corporations and their culture in the world today. The film seems to ultimately suggest that with such power and such beneficial legal status should come a responsibility to protect and respect her fellow citizens. One criticism I have of the movie is the one sided picture it presents. One of the most constant criticisms I have of right leaning documentaries and news coverage is how one-sided (and often inflammatory) they are. Intellectual consistency leads me to want the same thing even for those pieces with which I tend to agree more. One of the things that my time as an academic has taught me is that there is always nuance in an argument. Finding where those nuances are and using that to develop common ground would seem to me the best way to develop momentum and change.In their 2004 documentary The Corporation, Mark Achbar, Jennifer Abbott and author Joel Bakan delve into the ascent, characteristics, and downfalls of one of the most pervasive entities of the modern era: the corporation. The Corporation focuses on “corporations” and “corporatism” as a whole rather than dissecting any particular, singular business behemoth. In doing this, the film makers coerce viewers to think about the entirety of the issues associated with corporations rather than allowing us to point fingers at a single scapegoat. This film features an all-star list of contemporary political and economic thinkers such as Noam Chomsky, Michael Moore, Naomi Klein, and Milton Friedman whose commentaries intersperse with representatives from the corporate world. With the help from these folks inspired dialogue, the film weaves through a bevy of hefty topics such as pollution, sweat shops, privatization of natural resources, sustainable production methods, manipulative advertising to children, corporations’ effects on the biosphere, etc.

In the mid-1800s, corporations were recognized as individuals in the legal system in the United States. This recognition gave them unprecedented rights and powers. Because corporations are thought of as individuals, one might wonder what kind of an individual would an entity be who has no feelings or central nervous system or an actual body. This is exactly the question that these filmmakers tackle in this two and a half hour film. The documentary uses psychiatric and psychological standards to determine that if corporations were actual individuals, they would be considered psychopaths. Everything from selfish decision making to lack of regret to unrealistic thought patterns points to psychopathic tendencies that are common amongst corporations.

One of the presumptions that has informed much of the work on corporate accountability for human rights violations is based on a variation of the classic “profit maximization” framework – namely that, because corporations are primarily focused on maximizing shareholder interests, corporate motivations necessarily eschew any social goals that conflict with the profit maximization mantra. This idea was made most famous by Milton Friedman’s article written in the 1960’s (and which I’ve covered here). However, other scholars have taken that idea and formulated some ancillary thoughts regarding the consequences of the profit maximization model for corporate behavior. Among the most popular iteration of that idea was done in the documentary The Corporation (which I’ll blog about next week), however, even before then, others have taken the notion of profit maximization through its intellectual paces using other disciplines as their foundation. One such article is covered here below.

In their Harvard Business Review article from1982, Kenneth E. Goodpaster and John B. Mathews, Jr. ask a significant question which also serves as the title of the piece: Can a Corporation Have a Conscience? . The men let the cat out of the bag early when they say, “Organizational agents such as corporations should be no more and no less morally responsible (rational, self-interested, altruistic) than ordinary persons.”

The authors define the responsibility of persons in order to properly project those responsibilities onto corporations: (1) people are held accountable for the decisions that they make, (2) people have responsibilities to others based on their relationships with them, and (3) people have responsibilities to make decisions. While it may be too big of a leap for some to transfer these individual qualities that represent responsibility onto corporations, the authors say that the shift is a valuable one and it should be made. They say, “If a group can act like a person in some ways, then we can expect it to behave like a person in other ways.”

To conclude the article, the authors tackle some of the objections to the analogy as corporations as a morally responsible “person.” One such typical objection is that corporations are just artificial legal constructs and not actual persons so they should not be held responsible like individuals. The authors rebut that notion by saying that nobody is considering corporations persons in a literal sense. But, there are certain aspects of corporations that function like those of people as in decision-making or goal creation. With these types of activities, a sense of responsibility can and should attach. Another common objection to the analogy is that businesses are by their very nature bigger and more powerful than individuals and to unleash their power in a morally forceful way could lead to “moral imperialism.” So this argument basically says that these corporations could throw their power behind some unsavory forces. But, the authors say that while this is a serious concern, it is important to note that power is affective whether it is purposefully wielded or not. Action and inaction can both speak volumes. Moreover, the idea of imperialism should be more feared when moral reasoning is absent than when it is in use.

This post is part of the blog’s ongoing literature review of important works in the field of business and human rights. If you have any articles or works that you would like me to review, please let me know in the comments below. Part of the goal is to create a compendium for scholars as they research in this field.

In 2011, New York law professor Faith Stevelman wrote a law review article entitled “Global Finance, Multinationals and Human Rights: With Commentary on Backer’s Critique of the 2008 Report by John Ruggie.” In her article, Stevelman comments on the article written by Larry Catá Backer (we reviewed another of Backer’s article on the subject last week) which provided an analysis of the 2008 report of the “Protect, Respect, and Remedy” (PRR) framework. She looks at how the international community comprised of governments, trade organizations, businesses, and human rights advocates will curtail and/or deal with human rights violations on the global level. First, she discusses the PRR framework, then she comments on Backer’s treatment of it, next she looks at business and human rights questions as they relate to the legal system, and lastly, she looks at the connection between legal change and social change.

Highlights of the article include: * Her analysis of the PRR framework and how it remains an important report by Special Representative for Business and Human Rights, John Ruggie, because it delineates the necessary principles of the Human Rights Council’s goals for international businesses to adhere to human rights. The goal is to improve human rights compliance of individual business on a global scale.

**Image from http://www.nyls.edu/faculty/faculty_profiles/faith_stevelman