Corporation 20 20
= What would a corporation look like that was designed to seamlessly integrate both social and financial purpose? Corporation 20/20 is a new multi-stakeholder initiative that seeks to answer this question. Its goal is to develop and disseminate corporate designs where social purpose moves from the periphery.
"In 2004, Allen White and Marjorie Kelly of the Tellus Institute launched “Corporation 20/20″, an initiative to envision models of the future corporation, both financial and non-financial, and the enabling institutions aligned with such visions. (www.corporation2020.org).
In 2011, recognizing that time is of the essence to avoid overshooting the Earth’s ecological limits, Pavan Sukhdev at Yale University drew from the vision of “Corporation 20/20” and other thought leaders to prioritize four crucial, time-bound changes to begin transforming today’s dominant 20th-century corporate model into tomorrow’s “Corporation 2020” (www.corp2020.com). These complementary initiatives, which bridge long-term visions with a near term change agenda, have come together to form the Corporation 2020 Alliance (http://www.kosmosjournal.org/articles/corporation-20-20)
"New Principles for Corporate Design
1. The purpose of the corporation is to harness private interests to serve the public interest.
2. Corporations shall accrue fair returns for shareholders, but not at the expense of the legitimate interests of other stakeholders.
3. Corporations shall operate sustainably, meeting the needs of the present generation without compromising the ability of future generations to meet their needs.
4. Corporations shall distribute their wealth equitably among those who contribute to its creation.
5. Corporations shall be governed in a manner that is participatory, transparent, ethical, and accountable.
6. Corporations shall not infringe on the right of natural persons to govern themselves, nor infringe on other universal human rights."
Corporation 20/20 is unique in its focus on redesign. It seeks to integrate disparate streams of corporate change and create compelling, coherent visions of the future corporation. Examples of such streams that constitute components of the redesign landscape include:
- Corporate definition. A growing number of legal scholars are revisiting the traditional definitions of the corporation, opening up opportunities to reconstitute its purpose in light of 21st century economic and social realities. As Boston College legal scholar Kent Greenfield observed at the May 2004 inaugural meeting of Corporation 20/20, “Corporate law professors today don’t agree about anything – what the corporation is, who owns it, what directors should do, how companies should operate.”
- International norms. The UN, OECD and ILO exemplify intergovernmental and tri-partite government, labor and business organizations whose various codes offer essential ingredients to corporate redesign. The UN Subcommission’s Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises (2004) exemplifies a recent initiative with implications for corporate design and purpose, regardless of the size, type or location of the organization.
- Corporate law and charters. All nations, whether advanced or developing, have laws and charters that enable the corporation to exist under prescribed terms and conditions that constitute a formal license to operate. Efforts to reform such laws are at various stages in the US, UK and Australia, and related initiatives pertaining to corporate governance have emerged in nations such as South Africa and Brazil.
- Corporate personhood. Embodied in most legal regimes, but so fundamental as to merit separate mention, is the status of corporations as “natural persons,” with many of the same rights such as due process, free speech and other protections accorded human beings. Some reformers – such as the Program on Corporations, Law and Democracy (POCLAD) – believe that personhood is the most pivotal of all aspects of corporate redesign.
- Shareholder primacy. Gradually evolved over years of legal precedent and management theory, shareholder primacy is enshrined either de jure or de facto in management theory and corporate operations. Its roots and implications are now under scrutiny, including by Corporation 20/20 co-founder Marjorie Kelly in her book The Divine Right of Capital. Alternative models of the corporation that elevate non-shareholders' interests, e.g. stakeholder governance and a team production framework, provide the conceptual underpinnings of a new corporate purpose.
- Internal activism. Fundamental changes from within corporations occur when individuals are empowered to challenge conventional wisdom and question mainstream definitions of the corporation. Social purpose may be advanced by internal advocates ranging from CEOs to mid-level managers. Noteworthy examples are found in firms as diverse as Toyota and Nike, alongside medium and small companies such as Antioch Company and South Mountain Company. To date, risk-taking and leadership of this nature have yielded impressive results where they have occurred, but overall internal activism will continue to face major hurdles to scaling up its impact without changes in the external environment in which business operates.
- Voluntary CSR initiatives. Companies themselves, motivated by reputation advantage, stakeholder pressure and/or enlightened leadership, have undertaken a wide range of CSR initiatives. While the magnitude of impact on corporate purpose is difficult to ascertain, the vast majority of voluntary initiatives circumvent rather than confront systemic barriers to fundamentally altering corporate behavior beyond the voluntary, piecemeal and reactive approaches characteristic of the last decade."