While writing about Boeing threatening to leave the Puget Sound, I’ve had some thoughts batting around my mind about corporations more generally. I think all major (and most minor) corporations have 4 obligations. 3 that I think are necessary to their survival, as well as just decency and one that’s important but not really in the same way. Corporations have obligations to their shareholders and their investors. They have an obligation to their workers. They have an obligation to their customers. They also have an obligation, although probably not at the same level, to the community where they’re based.
I know this sounds naive, and it probably is. Still, I think those obligations, even though they’re sometimes in competition with each other, make corporations worth having as instruments in society. Obviously, we put a lot of emphasis on shareholders and investors. Probably too much, but they do play a role. And if they’re getting paid a reasonable amount for bringing a return on investment, then fine.
Still, businesses must have an obligation to their employees. When companies like Boeing threaten to leave, we keep hearing about the jobs they provide. But we rarely ever hear about an obligation to provide good jobs. When companies are lagging in this, unions, or government regulation like workplace safety and a minimum wage can force a minimum standard. But I think corporations have an obligation to the people working for them to treat them as something more than just cogs.
They also have an obligation to their customers. Ultimately, they’re making a product or service for someone or some group. When I use a good product, it reflects well on the company that made it, and when I have a bad product it feels like a bit of a betrayal. I think that’s part of the reason that people are sensitive to bad customer service.
Finally, and more generally, businesses have a duty to the communities where they’re located and where they do business. When companies give to charity, we call it “corporate citizenship.” As long as we understand that’s a metaphor, and corporations can’t actually be citizens, that’s fine as far as it goes. Still, there ought to also be an obligation not to pollute and to pay their taxes. Basically, it ought to be better for the community that a corporation locates there. Otherwise, why have them?
I don’t really know what my point is here, but I think the discussion is too much on shareholder value or return on investment, and not on the other things that companies ought to do.