DI Digest Idea 3 May 96

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LitScan Press Review

3.	Corporate Rights and Responsibilities
	As Corporate Power increases, a movement is gaining momentum to clarify the social and envi-ronmental responsibilities of global business. Some, like author David Korten, are going so far as to argue that the actual rights of corporations as enshrined in their corporate charters need scaling back. Corporations often enjoy special privileges - like legal status on a par with human beings, protection for shareholders in case of bankruptcy, and tax deductible status for 'normal' business expenses like legal defence costs should they commit a crime. Korten would revoke the legal status of com-panies that repeatedly break the law. A less radical suggestion for improving the context within which companies function would see corporations being more accountable to communities - and less inclined to play the 'we're moving' card in the face of undesired community demands. This might include direct community participation in business decision-making - an idea currently being tried out in co-management arrangements between aboriginal communities and forest companies like Weyerhauser (see DI #1). Anoth-er would see corporate codes of conduct developed as benchmarks for acceptable business practices -from the Valdez Principles to international rules governing 'fair trade' and foreign investment. Look for a new clearinghouse on corporate codes of conduct from the US group, Business for Social Responsibility. In North America and Western Europe, social and environmental responsibility has become the talk of boardrooms, as board members and senior managers face fines or even jail terms for lax company be-haviour and the call for greater accountability of transnationals strengthens. On a lighter note, US President Clinton plans to launch a new awards program for socially responsible business in the fall of '97. [balancing corporate privileges with new social and environmental prerogatives]
	corporate governance n. the debate on redefining corporate management processes, including social and environmental responsibilities codes of conduct n. voluntary corporate policies on so -cial and environmental practices
	Hawken, Paul. The Ecology of Commerce: A Declaration of Sustainability. New York: HarperBusiness, 1993. 250 p. Korten, David. When Corporations Rule the World. West Hartford, CT: Kumarian Press, 1995. 374p .
NOT HOT -	The Jack-of-all-Trades Approach to Conglomerates
	In the 70s and 80s, conglomerates were the 'in' thing. But now that we've hit the sober 90s, business people are discovering that all that glitters with promise is not necessarily gold for profit-lines, people or the planet. Businesses that binged on takeovers and expansions into areas they knew little about are now experiencing a rude awakening. The more sectors you slam together under one roof, the less likely you'll be able to operate each individual business well. The logic is the same when you examine the sustainability implications. Conglomerates are finding it equally hard to meet their environmental and social responsibilities across 20 sectors when all they really know is two. This brings us to the new rage - 'deconglomerization', the somewhat hard to swallow task of re-focusing on core business areas. Companies like Molson's Beer, for example, are retreating from side operations in the chemicals and cleaning products industry. Even in the world of big business, it seems, small can be beautiful.
*Virtual Ideas*	Excerpts from When Corporations Rule the World by David Korten More Corporate Governance links http://www.wp.com/CORPGOV