Rewiring Corporate DNA
by Michael D. Sauvante, NovaQuest Ventures, © 2008
The following paper was written for the BAWB Interactive Working Paper Series by Michael Sauvante published by the Center for Business as an Agent of World Benefit (B.A.W.B.) at Case Western Reserve University, Weatherhead School of Management
Abstract:
This paper establishes a case for the importance of understanding the critical role that corporate statutes play in fundamentally driving corporate behavior today. If society wants to permanently modify the behavior of all corporations - to make them more socially, environmentally and economically responsible - then we must work within the framework of corporate statutes.
All other efforts, no matter how significant from either a) a governmental regulation standpoint, b) a societal pressure and public relations standpoint, or c) a market pressure/consumers standpoint, will only address the symptoms of corporate behavior and not the underlying forces that are ultimately the cause of undesirable corporate behavior. I call those corporate statutes the DNA code of corporations. By “rewiring” this DNA code, we can bring about the core changes in corporate behavior that further enhance and augment all other efforts to make corporations a better servant to society and the environment.
Thus, we need an ultimate legal redefinition of the purpose of corporations. I propose a mid-term solution that could help to migrate society to a long-term solution. Lastly, I will show how the existing statutes of one state, Nevada, can be used today to encourage those desired changes. The Nevada statutes legally lock in that kind of desired corporate behavior, so that social, environmental and economic responsibility is internalized, rather than imposed externally.
Sauvante, M. D. (2008). Rewiring Corporate DNA. BAWB Interactive Working Paper Series 2 (2). pp 9-27. http://worldbenefit.case.edu/research/paperseries/.