Incorporation and responsability
To my understanding, the purpose of business incorporation is to absolve individuals of responsibility for the results of actions taken "by the corporation". This is a modern invention, and like other modern legal inventions (intellectual property comes to mind), we seem to have forgotten as a society that it was invented with a purpose (to create an environment that encouraged growth in industry and commerce by removing some possible liabilities). My questions, or perhaps even concerns, are:
The "citizen's united" ruling comes to mind, although it wasn't the inspiration for this thread. It implies that corporations are provided the protections afforded to individuals, but are not subject to the same responsibilities. On the flip side, in my province, a person can be held criminally liable for failing to take reasonable safety precautions, if that failure leads to harm or death.
One of the unpleasant by products of this cultural artifact is that we have a special kind of language. If you have spoken to someone from customer service in nearly any company, you'll be familiar with it. It is not the language that people use, but rather the language of a person assuming the mantle of a faceless conglomeration of business goals and priorities. It is without personality, empathy and a sense of accountability (although it often attempts to emulate these things).
I'd love to hear a counter-narrative or critiques of what I've said. That, or thoughts on the matter I perhaps didn't consider.
- Has the corporation outlived it's usefulness to society (assuming it had one)?
- Have we become so inured to the notion of a corporation as a group, responsible to no one but it's own profits, that we have created fertile ground for sociopaths to flourish in the boardrooms of our corporations without fear?
The "citizen's united" ruling comes to mind, although it wasn't the inspiration for this thread. It implies that corporations are provided the protections afforded to individuals, but are not subject to the same responsibilities. On the flip side, in my province, a person can be held criminally liable for failing to take reasonable safety precautions, if that failure leads to harm or death.
One of the unpleasant by products of this cultural artifact is that we have a special kind of language. If you have spoken to someone from customer service in nearly any company, you'll be familiar with it. It is not the language that people use, but rather the language of a person assuming the mantle of a faceless conglomeration of business goals and priorities. It is without personality, empathy and a sense of accountability (although it often attempts to emulate these things).
I'd love to hear a counter-narrative or critiques of what I've said. That, or thoughts on the matter I perhaps didn't consider.
Comments (5)
Corporations are treated like persons in order for them to conduct business to enter into contracts, I don't agree with all the exceptions provided to corporations as you indicate, but they have long standing in courts. Corporations have to able to act as individual entities, but to what extent?
I've had good and bad customer service experiences. The fully automated systems make me peevish,
"I said no"..."what did you say, I think you said no...is that correct? Arrgh! Caught in a capitalist time loop. Or you get connected to customer service room located is some very foreign country where basic communication is challenged and you suspect it is a kind of revenge for asking.
I wonder if it's possible to have a model for investment that doesn't include limited liability, and I'm wondering if that would have negative or positive consequences.
Quoting Cavacava
Why do they have to? Why can't they act as a bunch of individuals within a hierarchical power structure, with responsibility and being commensurate with decision making power? What would the effects be if they acted that way?
Quoting Cavacava
I am not a fan of that, but I was talking more about the robotic responses that come from a well rehearsed script. I have a problem with Virgin mobile that got quite contentious, but they still signed off on their public responses (twitter and facebook) with "luv Virgin". It was clearly disingenuous, and no real person in the midst of a hotly disputed conflict would speak this way (unless it was sarcastic).
The owners of a corporation do not have to be involved in the day to day activity of the corporation, although many are involved that way. The shareholders, those with the most to lose or gain, elect a president, and other corporate officers to operate the corporation because they have trust in these officers ability to generate a rate of return the shareholders finds commensurate with their investment.
They can act as a bunch of individual within a power structure (for instance as nodes), it all depends on how the corporation operating structure is established.
Regarding the liability issue, insurance is the answer. A sole proprietor buys insurance as does a corporation, in order to protect assets. Willful negligence may abrogate such protection.
If they both do the same, then what is the distinction? How is that the answer, if the answer is the same regardless of incorporation or proprietorship?
A sole proprietor owns all assets individually or with spouse. A sole proprietor can own multiple corporations, trusts and partnerships, and a corporation has same ability. I can't think of a difference when it comes to business insurance between what a corporation obtains and what an individual obtains...they are basically the same for similar sized protections. If I own a screw company individually or as a corporation and it is then destroyed by fire, I will want to collect either way.