A Corporate Code of Ethics?

Ethically Challenged asks: "Under the guise of recent legislation everyone at the publicly traded software company I work for is being asked to sign a 'Code of Business Conduct and Ethics'. In part, we have to swear to the following: we should not use company resources for any non-business purposes (I probably can't even write this); we must disclose to the CFO any relative that works for a customer, competitor or vendor; and, we are required to narc on coworkers who we suspect violate the code in any way. Are developers at other companies being asked to do this? Does it bother anyone that lowly workers like me are being asked to sign these things because executives are too immoral to behave themselves? Isn't all of this a colossal waste of time since most of it is common sense and it's pretty clear that the bad guys will ignore it anyway?" Most of this stuff sounds like the boilerplate protections most companies put in their employee agreements in the first place. Since you generally have to sign such agreements before you get your first paycheck, this new initiative seems rather redundant to me. Can someone more clued-in explain the justification behind this one?

Comments

Re:Problem is liability.

[rickwood]

Corporations per se are not the issue.

The issue is that in Santa Clara County v. Southern Pacific R. Co., 118 U. S. 394 (1886), the U.S. Supreme Court ruled that corporations were persons entitled to protection under the 14th Ammendment to the U.S. Constitution, a decsion regarding which Supreme Court Justice William O. Douglas later said, "There was no history, logic, or reason given to support that view."

Before this decsion things were decidedly different. An excerpt from Kalle Lasn's excellent article on the subject USA(TM) proves informative:

Early American charters were created literally by the people, for the people as a legal convenience. Corporations were "artificial, invisible, intangible," mere financial tools. They were chartered by individual states, not the federal government, which meant they could be kept under close local scrutiny. They were automatically dissolved if they engaged in activities that violated their charter. Limits were placed on how big and powerful companies could become. Even railroad magnate J. P. Morgan, the consummate capitalist, understood that corporations must never become so big that they "inhibit freedom to the point where efficiency [is] endangered."

The two hundred or so corporations operating in the US by the year 1800 were each kept on fairly short leashes. They weren't allowed to participate in the political process. They couldn't buy stock in other corporations. And if one of them acted improperly, the consequences were severe. In 1832, President Andrew Jackson vetoed a motion to extend the charter of the corrupt and tyrannical Second Bank of the United States, and was widely applauded for doing so. That same year the state of Pennsylvania revoked the charters of ten banks for operating contrary to the public interest. Even the enormous industry trusts, formed to protect member corporations from external competitors and provide barriers to entry, eventually proved no match for the state. By the mid-1800s, antitrust legislation was widely in place.

Furthermore, consider the information given on They Rule and Open Secrets. This information clearly points to a unhealthy shift towards plutocracy.

The original purpose of corporations was exactly as you describe, to spread the risk of an enterprise among multiple investors such that a failure wouldn't ruin them. Since Santa Clara, corporations have grown to the point where they are almost completely unaccountable to the people. A corporation is not a human person, so it is not subject to Maslow's Hierarchy of Needs. Yet, alarmingly, as corporate power has grown in the last century so has their collective control over the necessities of Maslow's Hierarchy for the rest of us.

In conclusion, while I agree that a legal and financial fiction very much like what we call a corporation is necessary for the continued economic health of the United States, I dispute that what we call a corporation today was the intent of the framers or is defensible by any measure other than the economic benefit to the corporate "person" itself.