For The love of One’s Company.

If the headline strikes you as ironic, you’re probably not alone. The Big Bad Corporation still grips the popular imagination: companies are bullies, companies are bureaucratic, companies are obsessed with profit margins, companies are… evil. Intellectually, we do appreciate the benefits of not regulating companies. Cookie-cutter legislation only increases transaction costs; its aim of regulating managers’ behaviour can be achieved more elegantly by free, competitive markets, such as the market for corporate securities.

Yet this fixation on economic efficiency is precisely the kind of fixation which makes us distrust companies and seek regulation in the first place! Surely there’s a better reason, a moral reason, as to why we should avoid legislating ‘best practices’?

Perhaps. Our political and social universe is today no longer dominated solely by state governments. Companies increasingly impinge on our lives, and not simply in a transitory way. Many of us spend a huge chunk of our time working in companies. We also invest significant amounts of personal wealth in them.

The upshot of this is that we no longer stand on the outside, looking in. Just as we are citizens within a state, many of us are also part of a company’s inner life – a company that is essentially also a political entity, with its own constitution and internal deliberative organs.

Like it or not, the company has thus become, like the nation-state, a public forum in which we can debate and exercise our own choices. Like how we don’t interfere when another state decides to construct a nuclear power plant atop a dormant volcano, we shouldn’t interfere with the autonomy of a company’s stakeholders to build their own collective identity, ethos and management systems. As with international law, the operative word here is ‘self-determination’.
So, if you love your liberty, then resist legislation… Love your company!

Zewei is a second year law student and an associate editor of SLR.

Stop me if you heard this one already.

Wait. You mean my favourite oil guzzling, incompassionate company is actually capable of something beyond appeasing its shareholders?

As corporations become more conscious of their image and seek to align themselves with “good causes”, the negative image they have loses its power. It’s a sign that Corporate Social Responsibility is finally making its way into the boardroom. Such publicity stunts are however, closely related to the money made from it. As long as I know that I was not implicit in a worldwide conspiracy to kill babies when I pop a french fry in my mouth, this social responsibility thing has done its job.

Since corporations are basically human inventions, it is remarkable how they seem to go against our interests. Perhaps this is due to the one-dimensional nature we accord to them. When the fundamental question of what a company is asked, someone will claim that companies are to make money, and we will all agree with him. We measure a company’s success by its share price and the net worth of its assets. Why are we surprised when a company would do anything for more money?

There is nothing wrong with companies. In fact, they are already useful. Humans cannot witness global warming or conduct deep space exploration because of our limited lifespan. Companies already provide a viable framework for private human endeavours to live forever. While the State may be another solution, it will suffer from diseconomies of scale, which was why we have companies in the first place.

It is nigh impossible to change a deeply entrenched assumption of company law, or even expect change to come from within the business community itself. The State, representing the interests of society best, should affect the landscape through the very laws that create the company.

Houfu is a second year law student and the Publicity Manager of SLR.