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By Colin Mayer

The corporation is the most important institution in the world – an institution that clothes, feeds and houses us; employs us and invests our savings; and is the source of economic prosperity and the growth of nations around the world. At the same time, it has been the cause of terrible poverty, deprivation and environmental degradation, and these problems are set to increase in the future.
Over the last few years alone we have endured:

• The accounting scandals in Enron and WorldCom
• The Libor scandals
• The underpayments of corporation tax
• The misselling of mortgages, payment protection insurance, and derivatives
• The financial crisis
• The environmental disasters in the Gulf of Mexico and Fukushima

Each of these is thought to have their own cause and to require their particular solution. This is fundamentally wrong: the problems are not specific and the solutions are not individual. There is a generic problem that requires a common solution. The problem is the corporation and the solution is to fix it and not everything around it.

Fixing the corporation involves addressing its failures of ownership, values, governance, regulation and taxation. This requires:

• Corporations taking responsibility for their actions and consequences, and having long-term committed shareholders;
• Corporations having clearly defined values and principles, and truly independent boards of directors responsible for their implementation;
• Tougher enforcement of public laws regarding bribery, corruption, environmental damage, fraud, insider dealing and market abuse;
• More stringent protection of our financial systems and ecosystems;
• Less intrusive regulation elsewhere and greater use of the corporate tax system to align interests of corporations with society at large.

Implementing these changes involves a reform of business education and a redefinition of the roles and responsibilities as well as rights and rewards of executives and investors.

This is not so much a reinvention as a rebirth of the corporation. Historically it was established by royal charter with a defined public purpose to undertake voyages of discovery and promote trade. The family firms that succeeded it were frequently established by founders with strong ethical principles and visions. Two corporations that illustrate that are Lehman Brothers and Barclays Bank, not today’s versions but those of the 19th and 17th centuries respectively. Mayer Lehman, the founder of Lehman Brothers, took his children every Sunday to the Mount Sinai hospital to see the plight of the less fortunate members of New York society. John Freame, the founder of Barclays Bank, wrote Scripture Instruction, a principle text used by the Quakers for more than a century. Over time those strong values have contracted into a single one of maximizing the short term earnings of shareholders.

That is not universally the case – some of the world’s most successful corporations and best performing economies have very different purposes and values. Bertlesmann one of the world’s largest media companies, Robert Bosch the automotive company, Carlsberg the brewing company, and Tata the conglomerate owner of Jaguar Land Rover are all structured as industrial foundations with boards that are responsible for the values and principles of their organizations. The Nordic and Scandinavian countries, which are currently being upheld as models for the rest of the world, emphasize a broader set of corporate principles encompassing a wider set of stakeholders than their shareholders.

This bears not only on the positive aspects of what corporations could do but also on the normative ones of what they should do. While notions of morality are well developed in relation to individuals, they are not in respect of corporations. Indeed, the idea of a moral corporation would generally be regarded as an oxymoron. It is not. What gives it substance is the ability of the corporation to establish levels of commitment to which we as individuals can only aspire. What makes it credible is the coincidence between the normative goals of doing good and the positive ones of making goods because ultimately the moral corporation is a commercially successful one and the competitiveness of nations depends on the moral fibre of its corporations.

Restoring trust in corporations is one of the most important policy issues of the 21st century. Without it economic policies will fail, environmental degradation will intensify and financial systems will collapse. With it, we can achieve levels of economic prosperity and well-being that far exceed what we have experienced to date.

Video: Colin Mayer on fixing the broken trust in corporations

Click here to view the embedded video.

Colin Mayer is the author of Firm Commitment: Why the corporation is failing us and how to restore trust in it (OUP, 2013). He is the Peter Moores Professor of Management Studies at Oxford University’s Saïd Business School, an Honorary Fellow of Oriel and St Anne’s Colleges, Oxford, and a Professorial Fellow of Wadham College, Oxford.  He is a member of the UK Competition Appeal Tribunal and the UK Government Natural Capital Committee, and a Fellow of the European Corporate Governance Institute.

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The post Why the corporation is failing us, and how to restore it appeared first on OUPblog.

1 December is World AIDS Day. Here Kenneth Mayer, MD, explains what makes the 2012 observance different from all those before – and, hopefully, those to come. Dr. Mayer is Co-Editor of Clinical Issues in HIV Medicine, Co-Chair of the HIVMA/IDSA Center for Global Health Policy’s Scientific Advisory Committee, founding Medical Research Director of Fenway Health, a visiting professor at Harvard Medical School, and an attending physician and director of HIV Prevention Research at Beth Israel Deaconess Hospital in Boston.

By Kenneth Mayer

Last year, on World AIDS Day, U.S. President Barack Obama set ambitious goals to reach more people with treatment and fundamental prevention. Echoing U.S. Secretary of State Hillary Clinton’s call for an “AIDS-free generation,” he envisioned a tipping point in a 30-year battle to subdue the world’s costliest epidemic.

This World AIDS Day, the administration’s release of a global AIDS roadmap takes the vision into practice. Outlining the U.S. government’s commitment to apply research to reality, with the efforts of affected countries and other donors, it is as much a promise as a challenge.

The plan serves as a solid indication that three decades into a struggle that began without direction, and that sometimes seemed futile, the U.S. has set a course to continue the pace it has achieved in the last year, while giving partners encouragement and reason to match those efforts. It underscores, at a time of worldwide economic challenges and competing concerns, that this investment will yield gains, this is a battle that can be won, and this is not the time to stand still.

The global health community and its researchers, policy makers, donors, field workers, and affected populations know what to do to begin to end this epidemic, and now need to do it. To realize the magnitude of this opportunity, compare where we are now to where we were 31 years ago when fear, ignorance, and prejudice stymied responses while AIDS’ death toll multiplied exponentially as it circled the world. With little clue as to how the virus was transmitted from 1981 to 1985 rumors and mistrust also spread. Through epidemiological research we overcame the terror of those years, understanding that without blood exchange or intimate sexual contact the virus was not readily transmitted. Researchers’ discovery in the mid-1990s that combinations of antiretroviral drugs could arrest the virus changed it from a death sentence into a manageable disease, for many. Shamefully, the cost of those drugs kept the benefit of that breakthrough from being shared in the poor countries where relief was most needed. Finally, in the last decade, with the importation of generic medicines, the establishment of The Global Fund to Fight AIDS, Tuberculosis and Malaria, and the President’s Emergency Plan for AIDS Relief, work to confront the epidemic emerged from laboratories and wealthy countries, to what are now some of the most formidable front lines.

Yet we continue to fall short. We know that injection drugs are a major vector for HIV transmission, but many countries punish users of those drugs rather treat them with opioid substitution therapy and protect them with needle exchange programs. Homophobia and criminalization of gay sex threaten efforts to even count the toll in countries where HIV is most prevalent. Programs to prevent transmission of the virus from mothers to infants are hobbled by constraints on family planning commodities. Sex workers are marginalized by efforts that exclude their input. Treatment and prevention programs fail to reach people with physical and mental disabilities. While tuberculosis is the primary killer of people living with HIV, screening and treatment for the two diseases remain unlinked. While donors have imported some of the means to fight the epidemic, too often they have imported answers as well, failing to allow for the diversity of needs and affected populations in different countries.

With a plan that includes the needs of all affected populations, the tools we have now will be powerful. The study known as HPTN 052 showed that early initiation of antiretroviral therapy could decrease the transmission of HIV in couples in which only one partner was HIV-positive by 96 percent. The use of an antiretroviral drug as pre-exposure prophylaxis in combination with other risk-reduction measures, was shown to be effective in protecting men who have sex with men, and heterosexual men and women from acquiring the virus.

These discoveries will be useless, however, if people who need medicine to save their lives don’t get it. While eight million people are getting treatment, 34 million are living with the virus. Maintaining the momentum of treatment coverage that the U.S. has achieved in the last year in Africa is imperative to meet the original humanitarian mission of the response as well as to continued progress.

Then, with shared responsibility and political will, the next World AIDS Day can be one on which we can see the end of the road, far ahead but certain, when we can stop the further spread of HIV.

To raise awareness of World AIDS Day, Dr. Mayer and Daniel Kuritzkes, MD (Co-Editor of Clinical Issues in HIV Medicine) have selected recent, topical articles, which have been made freely available for a limited time by  The Journal of Infectious Diseases and Clinical Infectious Diseases. Both journals are publications of the HIV Medicine Association and the Infectious Diseases Society of America.

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Image credits: World AIDS Day press images via worldaidsday.org media centre.

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Banned Book Week~ Sept 29-Oct 6, USA

Canadian Library Month~ Oct 1-31, Canada

Frankfurt Book Fair~ Oct 10-14, Frankfurt, Germany

Boston Globe-Horn Book Awards Ceremony~ Oct 12, Boston, MA, USA

Teen Read Week~ Oct 14-20, USA

Library Week~ Oct 15-21, New Zealand

Tomas Rivera Mexican American Children’s Book Award~ Oct 17, Texas, USA

International Festival of Authors~ Oct 17-27, Toronto, Ontario, Canada

Tauranga Arts Festival~ Oct 18-28, Tauranga, New Zealand

Reading Association of Philippines Conference~ Oct 19-20, Bacolod City, Philippines

Jane Addams Children’s Book Awards Ceremony~ Oct 19, New York City, New York, USA