The Sustainable CorporationJune 25, 2014
Is the modern corporation sustainable? WFU Law professor and CEES advisory board member, Alan Palmiter, investigates such questions in a course he has taught for the past two years in Bergamo, Italy. The course grew out of a symposium sponsored by CEES and the Wake Forest Law Review.
The course begins with the observation that “the corporation is a construct, existing only as a figment of the human imagination” and develops a theme – widely accepted by scholars and business participants – that the modern corporation is not sustainable.
The course unveils that, by design, the corporation is not meant to satisfy current social needs while ensuring that future generations can meet their needs – a widely-used definition of sustainability. Instead, the corporation is a highly efficient mechanism for externalizing social (and ecological) costs. It focuses on short-term financial results for its equity owners and stock-incentivized managers. Its decision-making apparatus is the hands of an inward-looking cadre of business people who naturally are inclined to “group think.”
Recent responses to the corporation’s “non-sustainability,” including environmental laws that modify corporate limited liability; the CSR movement’s voluntary internalization of social costs; and increasing employee empowerment and institutional shareholder activism, “come up short” according to Palmiter. So the course looks at more radical approaches: new business forms that require the mixing of profits and social good; repurposed disclosure mandates to focus management attention on the triple-bottom line; and new (really ancient) modalities of corporate leadership.
The course will be offered through the Law School and the new MA in Sustainability program next year.