Some people believe that corporations have a responsibility to promote the well being of the societies and environments in which they operate Others believe that the only responsibility of corporations provided they operate within the law is to make as mu

It is not uncommon for some to argue that, in the world in which we live, corporations
have a responsibility to society and to the environment in which they operate.
Proponents of this view would argue that major environmental catastrophes (e.g.,
the oil spill in the Gulf) are key examples of the damage that can be wrought when
corporations are allowed to operate unchecked. Yet within that very statement lies a
contradiction that undermines this kind of thinking — it is necessary for outside forces
to check the behavior of corporations, because we do not expect corporations to
behave in such a manner. In fact, the expectation is simply that corporations will follow
the law, and in the course of doing so, engage in every possible tactic to their advan -
tage in the pursuit of more and greater profit. To expect otherwise from corporations
is to fail to understand their purpose and their very structure.

The corporation arose as a model of business in which capital could be raised
through the contributions of stockholders; investors purchases shares in a company,
and their money is then used as the operating capital for the company. Shareholders
buy stock not because they are hoping to better make the world a better place or
because they have a desire to improve the quality of life but because they expect to see
a return in their investment in this company. The company may itself have generally
altruistic goals (perhaps it is a think tank that advises the government on how to
improve relations with the Middle East, or perhaps it is a company built around finding
alternative forms of energy), but the immediate expectation of the investor is that he
himself will see dividends, or profits, from the investment he has made. This is even
more true in the case of companies that are purely profit driven and which do not have
goals that are particularly directed toward social improvement — a description that
applies to the vast majority of corporations.

Is it a bad thing to have a corporation negatively affect the environment (and by
extentsion, its inhabitants)? To pump noxious fumes into the atmosphere as a
by-product of its manufacturing processes? Of course, and this is why agencies such
as the EPA were established and why governments — federal, state, and local — are
expected to monitor such companies to ensure that such practices fall within the
boundaries of legal expectations. Any and all corporations should be expected to
temper their pursuit of profit with the necessity of following those safeguards that have
been legislated as protections. But the assumption that corporations have an inherent
obligation or responsibility to go above and beyond that to actively PROMOTE the
environment and the well-being of society is absurd.

Engaging in practices to adhere to legal expectations to protect society and the
environment is costly to corporations. If the very purpose of a corporation is to
generate profits, and the obligation to adhere to safety expectations established by law
cuts into those profits, then to expect corporations to embrace such practices beyond
what is required is to presume that they willingly engage in an inherently selfdestructive
process: the unnecessary lowering of profits. This is antithetical to the very
concept of the corporation. Treehuggers everywhere should be pleased that
environmental protections exist, but to expect corporations to “make the world a better
place” is to embrace altruism to the point that it becomes delusion.

This is not to say that we should reject efforts to hold corporations accountable. In
fact, the opposite is true — we should be vigilant with the business world and maintain
our expectations that corporations do not make their profits at the EXPENSE of the
well-being of society. But that role must be fulfilled by a watchdog, not the corporation
itself, and those expectations must be imposed UPON the corporations, not expected
FROM them.