Simple Truths: The Corporation

My parents are members of the Church of Jesus Christ of Latter Day Saints, also known as Mormons. Consequently, I was raised a Mormon and spent most of every Sunday until I was a teenager learning about, as I was told they are called, the "simple truths" of the Gospel of Jesus Christ. Although I have long since abandoned my faith in that particular school of thought (or cognitive dissonance as I like to think of it), I still cling to the idea that there are truths that are simple. Whether there really is truth and whether it could possibly be simple is another discussion altogether.

In the United States, there is at least one simple truth, and one that can be articulated very simply: the objective of any incorporated entity is to make the most possible money for its investors. Put another way, a corporation's single purpose is to make as much money as possible.

In the study of law, these truths are flowered up by judicial holdings and statutes to make it sound a little less menacing, but make no mistake, the purpose is clear. If the CEO, or any directors are thought to have been less than faithful and loyal to these purposes, they may be, at the very least, removed from their position. They may even be sued by shareholders in the name of the corporation.

Once you accept and internalize this simple truth, you should begin to see things under an entirely different framework. I have numerous conversations on this subject with people and I am amazed at how difficult it is for people to accept this. I believe it is because people feel that there is something very wrong with that premise.

When you get angry at an oil company for spilling oil into the Puget Sound, remember that at some point a decision was made that if they take fewer precautions in transporting oil, it would cost them less than cleaning up an oil spill--or denying fault in the event.

How about your local national car repair chain? Their objective of fixing your car will never supersede its profit motive. If it is less expensive, and even if they can make an example of you by vigorously defending your completely legitimate complaints, they will do so regardless of their customer-first approach they portray in their numerous advertisements and TV commercials.

Remember the next time you see and hear something from a news organization, all of which are owned by a small number of very large corporate conglomerates, that you are only hearing that which will not impede the overarching goal of their profit maximization. There are no principles and values involved. For example, Fox News consistently features pundits and speakers who extol family values, but they are also the network whose TV shows feature The Simpson's and Family Guy--hardly the model of traditional family values.

What about all those banks that lend money to communities in need? All those that look "beyond the numbers," because people matter to them most? If you believe that, you have not internalized today's simple truth.

Are corporations responsible for some "good" in our society and culture? Certainly, but never at the expense of their first and single responsibility. If they were to do so, the directors and officers would be removed and as I said, may even be the subject of extended litigation.

This is a simple truth. However, it is one that people resist accepting because it fundamentally alters, for the worse I would say, the perception of the place of people in our culture and society. That will only change for the better when people begin to accept the current situation.