1. How can we ensure corporations are held accountable for their actions “ethically” and “legally”?
In the latest years, due to the globalization forces, an unprecedented surge in the growth of multinational corporations is taking place, increasing their economic and social power to unimaginable levels. But the bigger the power the bigger the controversy around the price of this power, mainly on the ethic and legal schemes.
As a consequence, a contemporaneous trend is surging as a way to ensure corporations held accountable for their actions “ethically”, Corporate Social Responsibility (CSR). This tendency is about making companies responsible for their corporate behavior with better business practices and using their resources in a way that benefit the community. However, this practice has not been completely effective, because:
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Corporate Social Responsibility. Retrieved on march 2011 from: blog.acton.org |
CSR programs are still internal mechanisms, in which the corporation has the authority, making really complicated the evaluation of their effectiveness.
In the other hand, the legal responsibility of the corporations is still a challenge, because due to the lack of an international legal framework that rule their behavior, there is always going to be an issue of jurisdiction in the decision of being legally responsible to the regulation of their home country or their host country.
The discrepancies in the resulting literature conclude the only real conclusion is that there is no transparent path to standardize to corporate citizenship.
2. Should individuals (directors, employees, shareholders) bear any responsibility for the actions of a corporation? If so, to what degree?
A corporation is defined as an artificial person, who´s existence is considered separate and distinct from its members. As a person it has rights and responsibilities, but these are artificial responsibilities, because we cannot say that something that is virtual or fictitious can make decisions and assume them. In the last term, the decisions are taken by the people that conform the corporation and in this sense are them the ones who must be responsible for their actions. Not only the ones who work for it, like their directors and employees, but also and in the same degree their shareholders. Because how it’s mentioned in the movie “The Corporation”, the final objective of the corporation is to maximize the value of their shareholders no matter the price, they don’t care by which means this is achieved, because the important is the money.
3. What are the benefits of the corporate form? Could an alternative model offer these as well?
Under the law the corporation is consider as a legal entity, who´s existence is considered separate and distinct from its members, bringing:
· Limited liability over the corporation’s debts or liabilities protecting the member’s personal assets.
· Corporate tax treatment, in which their members pay taxes separately and apart from the corporation.
The stock structure under the corporation is constituted, make it:
· Attractive opportunity to invest in.
· Attractive for talented employees offering them ownership of the corporation through stocks.
· Flexible, because as shares can be transfer, it existence not depend on who the owners or investors are at any one time.
· Its operational structure allow the establishment of a set of distinct and separately roles (shareholders, board of directors and officers), in which the shareholders don’t participate in the operations of the corporation.
· The existence of the corporation is determined only by its shareholders. They can decide when to dissolve it or merge with another business.
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How a clerical error made corporations “people”. Retrieved on march 2011 from: hightowerlowdown.org |
4. Search for a foreign multinational corporation that has operations in Colombia. Research if they are run under Colombian rules or regulations or if they have special regulations?
In the following news article we can see how some multinational corporations operating in Colombia have a special treatment in matters of regulations. In this case some oil consumer companies, under the Upme (Unidad de Planeación Minero-energética) resolution, received a “huge gift” by the government not charging them a global oil tax. Let see the article:
5. Should economic efficiency (Main argument for privatization) be the primary concern for commons and public services? Are there other criteria to determine who should own or operate them?
Common and public services are the services that should be provided by government to all its citizens, regardless of income. According to these, the primary concern for the privatization of public services must be that they accomplish its function to be available for all, reducing it cost and improving the quality and efficiency. The public’s benefit must be upon the economic efficiency. To achieve this the privatization must occur under a framework in which the government and the corporation work together: They should consider which functions are going to be more effective under the government and under the private sector, it should be an adequate number of companies competing for the development of these functions and it should be regulated by detailed, concise and specific contracts that has rigorous control by the government through performance indicators.
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| Fat Cat Water Privatization. Retrieved on march 2011 from: lalinternadediogenes.wordpress.com |
REFERENCES:
- Holland, C. 2010. Multinational Corporations and Global Governance: Is Corporate Social Responsibility Enough? A study of Chevron’s Yadana Gas Pipeline Operations in Burma. Covalence intern analyst papers, advance online publication March 4. DOI: http://www.ethicalquote.com/docs/MultinationalCorporationsandGlobalGovernance.pdf
- Bennet, J. 2002. Multinational Corporations, Social Responsibility and Conflict. Journal of International Affairs, vol. 55, no. 2, advance online publication March 4. DOI: http://info.worldbank.org/etools/docs/library/57510/bennett_article.pdf
- Advantages and Disadvantages of Forming a Corporation. Advance online publication March 2. DOI: http://www.allbusiness.com/business-planning/business-structures-corporations/686-1.html
- Laguzza-Boosman, K. 2008. Does Privatization at the Federal Level Serve the Public Good?. Walden University, MMPA 6250-06. Online publication March 2. DOI: http://www.klbcommunityconsulting.com/DoesPrivatizationattheFederalLevelServethePublicGood.pdf
- El Espectador. 2010. Denuncian ‘regalo’ del Gobierno a transnacionales que usan combustibles. El Espectador. November 2: Politics.
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