Public corporations are responding to consumer demand and pressure from Wall Street. Professors Christopher Wright and Daniel Nyberg published Climate Change, Capitalism and Corporationslast fall, arguing that businesses are locked in a cycle of exploiting the world's resources in ever more creative ways.
"Our book shows how large corporations are able to continue engaging in increasingly environmentally exploitative behaviour by obscuring the link between endless economic growth and worsening environmental destruction," they wrote.
Yale sociologist Justin Farrell studied 20 years of corporate funding and found that "corporations have used their wealth to amplify contrarian views [of climate change] and create an impression of greater scientific uncertainty than actually exists."
Corporate capitalism is committed to the relentless pursuit of growth, even if it ravages the planet and threatens human health.
We need to build a new system: one that will balance economic growth with sustainability and human flourishing.
A new generation of companies are showing the way forward. They're infusing capitalism with fresh ideas, specifically in regards to employee ownership and agile management.
The Increasing Importance Of Distributed Ownership And Governance
Fund managers at global financial institutions own the majority (70%) of the public stock exchange. These absent owners have no stake in the communities in which the companies operate. Furthermore, management-controlled equity is concentrated in the hands of a select few: the CEO and other senior executives.
On the other hand, startups have been willing to distribute equity to employees. Sometimes such equity distribution is done to make up for less than competitive salaries, but more often it’s offered as a financial incentive to motivate employees toward building a successful company.
According to The Economist, today’s startups are keen to incentivize via shared ownership:
The central difference lies in ownership: whereas nobody is sure who owns public companies, startups go to great lengths to define who owns what. Early in a company’s life, the founders and first recruits own a majority stake—and they incentivise people with ownership stakes or performance-related rewards. That has always been true for startups, but today the rights and responsibilities are meticulously defined in contracts drawn up by lawyers. This aligns interests and creates a culture of hard work and camaraderie. Because they are private rather than public, they measure how they are doing using performance indicators (such as how many products they have produced) rather than elaborate accounting standards.
This trend hearkens back to cooperatives where employees collectively owned the enterprise and participated in management decisions through their voting rights. Mondragon is the oft-cited example of a successful, modern worker cooperative. Mondragon's broad-based employee ownership is not the same as an Employee Stock Ownership Plan. With ownership comes a say – control – over the business. Their workers elect management, and management is responsible to the employees.