Do you work for a self-regulating psychopath?

Do you work for a self-regulating psychopath?

Shadow of a hand wielding a knife
ShutterstockDmitry Karlov
Can your work in CSR really offset corporate killer instincts?

This is an excerpt from the book "I'm Right and You're an Idiot: The Toxic State of Public Discourse and How to Clean It Up," New Society Publishers.

An over-reliance on facts and a questionable belief in the power of reason contribute to today’s toxic conversations and acrimonious dialogue, but another area of great concern is propaganda, a polluting and polarizing behavior that is arguably as vast and destructive as any of the cultural or social forces already discussed. What’s more, in the case of modern corporations, deregulation has legitimized the use of unbridled propaganda and created a regulatory, legal and financial system that virtually demands it.

In his book "The Corporation: The Pathological Pursuit of Profit and Power," author, filmmaker and law professor Joel Bakan traced the corporation’s rise to dominance, right back to its origins centuries ago. Balkan illuminated how these juggernauts are required by law to elevate their own interests above those of others and pursue their goals with rampant self-interest, sometimes without regard for moral limits.

After seeing the film Balkan made from his book, I was keen to speak with him. I was interested in his views on the role some corporations play in corrupting public discourse, something I had occasionally seen up close during my career in PR. I asked Bakan what inspired him to write "The Corporation," and he explained the project was driven by a passion to inform people about an institution that increasingly governs their lives and poisons public discourse.

The law professor sees the contemporary corporation as a "very strange, potentially dangerous and destructive institution." Back in the late 1990s he started to observe the power of corporations as they exploded into public awareness, spearheading the development of globalization, deregulation and privatization. Governments began to abdicate much of their regulatory oversight and free corporations from legal constraints.

As a result, corporations emerged as self-governing institutions with the single goal of serving their own interests and those of their shareholders. Bakan’s work does not seek to vilify or analyze the people who run corporations or work for them. He critiques the institutional nature of the corporation as legally created, saying it is an invention that has been imbued with characteristics that, if observed in a human being, would swiftly be diagnosed as psychopathic. This view initially seemed a little extreme to me, as I built my business around representing successful corporations and never saw anything remotely like this in the companies I worked with.

But then Bakan outlined the characteristics of a psychopath, including: callous unconcern for the feelings of others; incapacity to maintain enduring relationships; reckless disregard for the safety of others; deceitfulness, repeated lying and cheating people for profit; incapacity to experience guilt; failure to conform to social norms with respect to lawful behavior.

Looking at this list in relation to the excesses on Wall Street, the guiles and machinations of big banks, the environmental record of oil and gas companies, the misinformation campaigns we wrote about in "Climate Cover-Up" and the lies and lack of guilt in the tobacco industry, I began to see Bakan’s point.

"Not only have we created an institution in the image of a psychopathic human being, but we’ve actually conferred personhood on it ... and as a society we’ve given it immense power to govern every aspect of our lives," Bakan said.

Increasingly, corporations have limited legal obligation to be concerned about the environment but are compelled to do what’s best for their shareholders, whether that means investing to ensure a favorable scientific environment, favorable public opinion environment or favorable political environment so that they can lower production costs and increase profits.

That’s not a conspiracy, Bakan stressed. "That’s just the logical dynamic of a particular institution." Corporations do an excellent job of churning out masses of marketing materials that suggest they are doing the right things, but when you look at the actual record, they are not being responsible to social interest, nor can they be expected to be.

"How can you expect a psychopath to be self-regulating? The concept doesn’t make any sense," said Bakan, who calls corporate social responsibility an oxymoron.

I found Bakan’s analysis more believable than the evil CEO explanation or any conspiracy theory. The current system makes it incredibly difficult for a corporation to behave any differently. These companies run on shares, return of stock options, and their whole structure demands they do nothing to jeopardize profits. It’s an over-simplification to turn this fact into a good guy, bad guy narrative because corporations are required by law to act this way.

Bakan noted that some of his best friends work in corporations, and many excellent employees are genuinely committed to social values such as the environment. They want to see their companies doing good things in the world, not causing harm. But when they walk into their offices they are "metaphorically and practically" bound by the institutional demands of their corporations, and that means "social responsibility to stakeholders can only be strategic."

Their critical path must be to serve shareholder profits  that’s been the unique nature of the institution and its legal obligations since corporations were first formed. Corporations were first conceived in the late 19th century as immensely powerful tools to attract large sums of capital; they created massive projects such as railroads and more recently airlines and the internet. They were mighty, effective investment capital vehicles, and they were constrained so they would not cause more harm than good.

Beginning in the 1930s "there began to develop a robust regulatory system and regulatory state," Bakan observed, but in the 1980s we began to see a dismantling of regulation, which continues today. "Now the notion is, 'Let’s let the powerful vehicle do its own thing and hope it constrains itself. ... Somehow everything will trickle down and play out, and the market will take care of it so everything will be fine.' Well, everything isn’t fine."

Today’s corporation, as an institution, lacks any intrinsic or internal ability to constrain itself morally or ethically, and Bakan sees this as very dangerous: "If you put blinders on a donkey, that donkey is going to do a much better job of going straight down the street and pulling the cart. But it will not see what’s happening at the sides, and it won’t have any responsibility for that."

Over the past 30 years or so, "there has basically been a deal, and the deal is that government would become less involved in demanding that corporations be socially responsible, providing corporations would take on the task of regulating themselves and becoming more socially responsible."

It used to be that public laws demanded that corporations toe the line, but now we rely on the private choices of individual companies. Many corporations talk the talk of social and environmental responsibility, but Bakan sees a huge gap between words and action, and said the deal has not been a good one for the people, for the environment or for stakeholders.

Chief Justice Leo E. Strine Jr. of the state of Delaware has written that corporate sustainability misunderstands Delaware law and that it "is not only hollow but also injurious to social welfare to declare that directors can and should do the right thing by promoting interests other than stockholder interests."

Corporations are invested in creating a scientific domain that is favorable to them and hostile to those who criticize them. For instance, a pharmaceutical company is legally bound to act in ways that serve its shareholders, and it will naturally seek to shape public perception about science, “to control science for its own ends.” Bakan observed that public relations machines have worked hard to repress the true nature of corporations and convey the notion they "are just like you and me ... warm and fuzzy, like a good neighbor. They are [the] Michelin Man and Ronald McDonald."

Massive amounts of money have been poured into efforts to paint a caring human public face on corporations, to present them as benevolent servants of humanity.

"The extent to which this has been successful has been a disaster for democracy and for various values like the environment," Bakan said flatly. A good example of how companies edit information to promote their point of view was an Enbridge Northern Gateway Pipeline campaign that showed a map that erased about 1,000 square kilometers of islands from the Douglas Channel, in an attempt to make the company’s proposed oil tanker route look less treacherous.

This campaign also included the slogan, "It’s a path to world class safety standards and low environmental impact." In another Enbridge ad, accompanying an emerald-green underwater scene, was a poem that included the lines: "A limitless pool of life/A playground for the tiny and giant things that live within it/And a gateway to the other side."

Bakan commented, while corporate social responsibility in some instances does some good, it is most often merely a token gesture that serves to mask the corporation’s true purpose. Bakan stressed that because the corporation as an institution lacks any moral or ethical constraints, it is necessary to impose constraints externally through regulation "and find a balance between what it can do well and the harm it will inevitably cause if not constrained."

I asked Bakan why the public has failed to demand more regulation. "That’s the $64,000 question," he said, and it has to do with the manufacture of ideology, with the manufacture of public opinion, with the role that for-profit, advertising-driven media plays in forming public opinion, the lack of critical-thinking training in our education system  and all the various ways in which knowledge is constructed in our society. "We citizens have been asleep at the switch."