[Jan 21: In light of yesterday's Supreme Court Decision, I'm re-posting this serious & pop-culture critique of the anti-democratic argument that Corporations Are People. Scott Klinger writing over at Alternet, sets out what it would/should mean for corporations really to be treated as "persons" and thus have the same responsibilities as people too. Me, I'd like these corporate persons to be held to the same contribution limits as the next person-- so that I and Exxon would both be limited to $2,400 per candidate per election.]

If we were to list the top five or so Supreme (Court) mistakes of the last 200+ years, on that list would be the mistake in 1886 to treat a Justice’s unofficial remark about corporations’ hypothetical legal status as though it were part of the Court’s actual decision. This offhand suggestion that corporations could be considered ‘persons’ in the eyes of the law is a mistake that’s compounded over the years, to the point where it has fundamentally distorted democracy and capitalism as we “know” them.

Okay, so now you know my feelings about the issue.

But did you know that Stephen Colbert feels the same way?

Check out this clip from a show earlier this week, where Colbert makes sense of a most unfunny perversion of civil rights.

Corporations’ ‘Personhood’ is an inauthentic identity

The notion that corporations should have rights (but not responsibilities) as though they were actual human citizens has become so taken-for-granted as “the way things are” that it handicaps our ability to understand any for-profit organization’s authentic identity.

The ‘personhood’ that grants corporations the same rights to free speech and grants them even more political power than a human individual contradicts both our understanding of “person” and our understanding of “citizen”. It makes it hard for us to have a thoughtful discussion of how a for-profit corporation should participate in democracy. It distorts not only how we consider corporate cash contributions to political candidates and parties, but also how we think about corporate social responsibility and corporate citizenship.

Do you understand the ‘Corporations as persons’ logic?

There are many arguments for why corporations make bad “people” and even worse “citizens”. Chief among these is the difference between why people exists and why corporations exist. Consider this argument from the Attorney General, in this excerpt from the oral arguments to the Supreme Court, courtesy of the DailyKos,

JUSTICE STEVENS: One of the amicus briefs objects to — responds to Justice Kennedy’s problem by saying that the problem is we have got to contribute to both parties, and a lot of them do, don’t they?

SOLICITOR GENERAL KAGAN: A lot of them do, which is a suggestion about how corporations engage the political process and how corporations are different from individuals in this respect. You know, an individual can be the wealthiest person in the world but few of us — maybe some — but few of us are only our economic interests. We have beliefs, we have convictions; we have likes and dislikes. Corporations engage the political process in an entirely different way and this is what makes them so much more damaging.

CHIEF JUSTICE ROBERTS: Well, that’s not —I’m sorry, but that seems rather odd. A large corporation just like an individual has many diverse interests. A corporation may want to support a particular candidate, but they may be concerned just as you say about what their shareholders are going to think about that. They may be concerned that the shareholders would rather they spend their money doing something else. The idea that corporations are different than individuals in that respect, I just don’t think holds up.

GENERAL KAGAN: Well, all I was suggesting, Mr. Chief Justice, is that corporations have actually a fiduciary obligation to their shareholders to increase value. That’s their single purpose, their goal.

If organizations exist to make money (aka increase shareholder value), then their concerns are ultimately far more narrow than the concerns of real people, real citizens, whose life goals and purpose are far more complex. More broadly, citizenship itself requires a concern for more than short-term profit. Thomas Jefferson, Thomas Paine and even Alexander Hamilton all understood this too.

Defining Citizens & Citizenship: An Important Topic for Management Education

Whether you agree or disagree that corporations should be people, we should all be having a conversation about what it means to grant equal citizenship to corporations. Yes, many of us are focused on the organizational issues around the political conversation about Health Care reform, and thus may not be paying attention to Supreme Court rulings. Even so, we should also be educating ourselves about both sides of the argument about corporate personhood.

A conversation about the relationship between business, politics and society should be part of every MBA students education about business. Were I to redesign an MBA curriculum, or even teach again my class on “Books for Brave Managers”, this topic would be on our agenda.  One 90 minute class on this topic could teach future business & non-profit leaders how to think more deeply about the roles of organizations (for profit and not for profit) in our national and local civic lives.

As we wait for MBA curricula to be redesigned to reflect the emerging needs of business and society, we can learn more about this topic ourselves. It may seem very abstract to ask questions like “What is an organization really?” “Should organizations be the legal equals of individual people?” “Is making corporations ‘persons’ the best way to have corporate (for profit) entities participate in democracy?”, but the implications of our explicit and implicit beliefs are quite real. Just consider What could Change if Corporate Personhood Were Abolished?

What about you: Do you think that more managers and leaders should understand the arguments for and against Corporate Personhood?
Originally posted September 18, 2009

Here are some resources to check out:

David Korten’s book ” When Corporations Rule The World”
Thom Hartmann’s book “Unequal Protection: The rise of corporate dominance and theft of human rights”.
The Women’s International League for Peace and Freedom
Reclaim Democracy.org

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• The Supreme Court examines Citizens United vs. FEC, the case of an anti-Hillary documentary. (slate.com)
• Citizens United Case Underlines Court’s Deep Ideological Divide (christyhardinsmith.firedoglake.com)

We’re delighted to feature a guest post from Mignon van Halderen, an expert on Organizational Reputation Management. Mignon is Assistant Professor at the Rotterdam School of Management (RSM), Erasmus University. At RSM, Mignon works in the Corporate Communication Centre where she combines teaching and applied research projects within the fields of Reputation Management and Corporate Communication.

We talk a lot about authenticity.

I overheard a conversation between two communication experts during a diner en pensant. One said to the other: Authenticity is one of the most important things in our field. The other firmly agreed, taking a sip of his wine and leaning back in his chair. I waited for his reply, but I was disappointed. He added nothing more to the conversation.

Is that it? I thought. Aren’t you going to probe how difficult it is to be authentic? “Or tell us how you think organizations can build authenticity, apart from just saying we try to practice what we preach in everything we do?

“Can’t you give me just one clue why authenticity is important in your specific organizational context and how you cope with it?

The importance of organizational authenticity seems nowadays so much to be taken for granted that it is used unqualifiedly in every piece of communication advice that I find. And that is where I start to worry.

When the principle of authenticity is advocated carelessly, authenticity as a goal for organizations risks becoming generic, hollow and without any meaning at all. I believe that at that point, the principle of authenticity itself starts to become inauthentic.

Because I want to be more thoughtful about the ways we discuss authenticity, I was glad to find this blog. Simply defined, Organizational Authenticity is achieved when organizations align their identity, image and actions. If companies can show that these three fit together in a healthy way, people find them authentic or ‘real’.

So what makes authenticity so powerful? For one reason, if an organization is believed to be authentic, people create more trust and liking toward the company. Moreover, employees find more meaning and confidence in the organization that they work for.

Another reason behind the power of authenticity, I believe, lies in the fact that authentic organizations allow us to recognize and believe their personality. And because we, as humans, are ourselves personalities, we have a strong inherent need to connect with other personalities. Therefore, exemplary authentic companies are often those organizations that succeed in expressing their personality. In doing so, they emotionally appeal to us.

However, creating and maintaining authenticity seems a completely different challenge (or opportunity) for different types of companies. Let’s consider three companies: Jack Cards on the one hand, and Exxon and BP on the other. Each company has a different approach and faces different challenges in creating authenticity.

Jack Cards: An Authentic Organization

Jack Card s is a start-up company of two of my friends in Boston. Their company is (to me) an excellent example of authenticity. The two Australian founders, both experiencing the difficult distance between themselves and their Aussi friends, came up with an idea : to connect personalities with personalities by combining the authenticity of good-old-classic greeting cards with the internet’s potential.

As emphasized by their slogan “Connecting Thoughtfully, Jack Cards helps customers to maintain a personal touch with friends in an easy way. Jack Cards not only reminds its clients of friends & family’s important events, but also makes it easy for their clients to connect with friends and family by sending a classic greeting card. You just sign up on their website (free), add the important events of friends & family (birthdays, graduations, retirement) and choose one of the distinctive design cards that Jack Cards offers. Just before each important date, Jack Cards sends the card to your home address (stamped and ready to mail). The only thing that is left for you is to write a personal note and post it in the nearest post box.

Authentic? Yes, because the service that Jack Cards provides is personal, human & traditional.

But even better, Jack Card s links what it says it values with how it executes its service. Jack Cards is Connecting Thoughtfully with its clients, who then connect thoughtfully with their friends and family. As one client raved:

I’m so excited that you’ve started this service – it’s already saved me tons of time and has ensured that my loved ones get the creative, beautiful cards that they deserve. It’s a perfect blend of technology and personal touch!

Jack cards offers beautiful designs t hat fit a lot of different personal tastes. It is easy to find cards that fit your personality and the personality of the friend getting the card.

So, we could say that authenticity is for Jack Cards an opportunity to create competitive advantage. After all, authenticity is the product that Jack Cards sells. Authenticity is its unique selling point and the two founders clearly know how to keep their authentic selling point….yes, authentic!

But let’s also look at the two other companies, Exxon and BP, whose products seem much less authentic – at least in terms of personality – but from whom we as society still expect authenticity .

Exxon and BP: Authentic? Liked and Trusted?

Exxon has clearly faced a lot of disappointment and anger from different stakeholders. But, oddly enough, its identity (being an oil farmer) has been perfectly aligned with Exxon’s explicit statements of who it is, as well as Exxon’s strong focus on drilling oil instead of developing alternative energy. Indeed, Exxon’s previous CEO has been notorious for his bold honesty about Exxon’s lack of interest in alternative energy. Even the current CEO stresses that Exxon doesn’t see much future in renewable energy sources. No gaps in Exxon’s identity, image and actions here. Pretty authentic, we could say.

Exxon authentic because it is acting on its core belief that investing in alternative energies is not a clever strategy to address global warming.

Yet, aside from satisfying its investors, Exxon’s authentic message has not really paid off in terms leading external stakeholders to like Exxon or to trust Exxon.

Why hasn’t Exxon’s authenticity lead stakeholders to trust or to like the company?

Because Exxon’s stakeholders expect more than just authenticity.

In addition to seeing Exxon be who it says it is, stakeholders also wish to see that Exxon operates in line with societal expectations, such as taking care of global warming by focusing on alternative energies.

BP’s approach to building an authentic reputation has been completely different from that of Exxon. BP was the first company to claim that it linked its identity to society’s growing concerns of global warming. BP introduced the Beyond Petroleum campaign and came a long way with showing that it walked the talk. A brilliant move, I would say. Authentic and responsive to society at the same time! But sadly, BP suffered two crises in 2004, a severe pipeline corrosion in Alaska and a refinery explosion in Texas. BP’s reputation for being concerned about the environment was harmed by both crises, and the authenticity of BP’s reputation was harmed.

• So, what should companies like BP and Exxon do to create and maintain authentic reputations so that they are not only authentic but also liked and trusted?

• How can BP and Exxon manage their reputations without losing sight of certain realities, such as the fact that technology is not yet advanced enough for them to provide their stakeholders with alternative energy right away?

Some supporters of GLBT rights are calling for consumers who support marriage equality to boycott "Mormon Organizations". These supporters want to punish the Mormon Church (Church of the Latter-Day Saints, or LDS) as well as Mormon individuals for supporting California’s Proposition 8 banning same-sex marriage.

(Note: The Mormon Church officially opposes same-sex marriage. However, not all active/practicing Mormon individuals oppose same-sex marriage. )

An important question for any activists intending to show their disapproval of an organization by boycotting it is finding a way to prove that the organization is culpable. One way to make an organization culpable for the perceived crimes of the Mormon Church is to identify the organization as a "Mormon Organization".

What’s A "Mormon" organization?

One big problem with this line of reasoning is– how do you define a Mormon Organization?  What makes one organization "Mormon", and another "not Mormon"?

Looking over the array of arguments for and against boycotting the Marriott corporation, you can deduce the criteria that folks are using to determine the Mormon identity of an organization. I arrange these into 3 Tiers– Tier 1 being convincing demonstrations of being Mormon, Tier 2 being suggestive but not sufficient indicators and Tier 3 being ‘spurious indicators’.

Tier 1: Convincing demonstration of identity:
You can be confident calling an organization "Mormon" if:

1. The organization is wholly or majority-owned by the Mormon Church.
2. Tenets, principles and priories of the organization are based on those of the LDS Church.
3. Part of the organization’s mission is furthering the causes and principles of the LDS.
4. The organization looks to the Mormon Church and to Mormon Church leaders for guidance on issues related to its business.
5. Practices and activities that are explicitly Mormon are official parts of the organization’s operation.
6. Being a practicing Mormon is a criterion for employment or advancement in the organization.

Here’s A Clear Example of a Mormon Organization: BYU

Brigham Young University is unequivocally a Mormon organization. Note this excerpt from BYU’s mission statement :

The mission of Brigham Young University–founded, supported, and guided by The Church of Jesus Christ of Latter-day Saints–is to assist individuals in their quest for perfection and eternal life.

In addition, BYU’s mission statement document

… also draws on the religious and educational teachings of the university’s founding prophet, Brigham Young. Quotations within the text come from the scriptures and from the counsel of modern prophets, whose teachings about BYU lay the foundation of the university’s mission.

One of BYU’s explicit Institutional Objectives is to "Develop friends for the University and the Church."

All (our work is) focused on building a network of friends and supporters throughout the world who can help advance our unique mission.

Students are required to take 2 courses on LDS theology, making education in Mormon doctrine an official part of every student’s curriculum.

Being a member of the Mormon Church is not a requirement for employment or admission at BYU. However, if you are Mormon, you’re expected to be a member in good standing. Prospective students are supposed to be religiously active in some way, whether LDS or not. (98% of students are LDS.) From the Admissions web page:

Each applicant must be endorsed by his or her ecclesiastical leader as one who is worthy to attend BYU and is living in harmony with the Honor Code and the Dress and Grooming Standards.

Another Example?

Okay, maybe it’s too easy to use BYU as the example of Mormon organization. How about this organization, the More Good Foundation:

While the Foundation is fully supportive of the Church and its mission, it is not directed by or funded through the Church; no Church funds are used for the Foundation. Our funds come through the good graces of individual donors who are interested in seeing us fulfill our goals and make a positive difference with LDS information.

Tier 2: Suggestive but not sufficient indicators

A second level of criteria suggest but don’t necessarily demonstrate the identity of the organization. However, these criteria are often used by outsiders who want to assign a Mormon (or other) identity to an organization.

Suggestive but not conclusive indicators of an organization’s identity are whether:

1. The organization’s CEO is a practicing Mormon.
2. The majority of the organization’s employees are practicing Mormons.
3. Some percentage of the organization’s shareholders are Mormon.
4. Practices and activities that are consonant with Mormon principles but are not explicitly Mormon are part of the organization’s informal culture.
5. The organization contributes to the Mormon Church and/or to the Church’s initiatives through its philanthropic activity (e.g., sponsorships, CSR, pro bono work, etc.).
6. Employees of the organization donate money and time to the LDS Church. (This criterion of individual donations is also used by the GoodGuide.com site

to determine an organization’s political sentiments.)

7. The organization is endorsed by prominent members of the Church.
8. The organization is "about the Church, but not from the Church."

On The Other Hand (OTOH): Lots of the employees of the Salt Lake City Winter Olympics were LDS members, but the SLC Winter Olympics was not Mormon.

JetBlue is run by an LDS member. That hardly makes it an LDS company.

Tier 3: Spurious ‘indicators’

Spurious indicators are criteria that plausible but false. There is just one attribute, geographic location, in this tier– but I’m sure as I keep looking at the Prop 8 boycott conversation we’ll discover some others.

OTOH: Just because the Sundance Film Festival is held in Utah does not make it a Mormon organization.

Where is this going? ….

I’m trying to get to a complete explanation for (and especially) against boycotting the Marriott Corporation. This explanation depends on having a full understanding of the criteria that stakeholders are using to identify an organization as Mormon— whether or not their criteria is convincing or their conclusions are rational.

It’s still unclear what is necessary and sufficient for defining an authentic "Mormon Organization". It’s also interesting how the criteria that I used to define an Authentically Black organization doesn’t seem to fit the task of defining an Authentically Mormon organization.

Any criteria we should add? Anything seem off to you? Please share your thoughts…by clicking on the word "comments" {between the grey brackets, under the ShareThis icon}, below.

Collateral Reputation Damage® is damage done to an organization’s reputation when advocacy by individuals or groups who may or may not be associated with the organization is interpreted by stakeholders as being actions by the organization itself.

Image of Collateral Damage from Chet Provorse

Hurting the Organization isn’t the focus, but …

Using the term “collateral damage” emphasizes that the impact on the organization’s reputation is not the focus of the individuals who are taking action. Rather, the damage is an epiphenomenon, an incidental byproduct of some other activity, where the organization’s reputation is damaged through “guilt by association.”

Stakeholders, who assume that the organization is guilty of something they reject, diminish the reputation of the organization in their own estimation. Sometimes, these stakeholders work actively to tarnish the organization’s reputation in the estimation of others, through PR campaigns, boycotts, and other practices.

I got this idea from the phrase “Collateral Damage” which is used to describe unintentional damage to non-military people or property. (All those Iraqi civilians ? Collateral Damage.)

Collateral damage refers to: “[the] unintentional damage or incidental damage affecting facilities, equipment, or personnel, occurring as a result of military actions directed against targeted enemy forces or facilities. Such damage can occur to friendly, neutral, and even enemy forces. ”

Collateral Reputation Damage ® vs. Reputation squatting ®

Collateral Reputation Damage® is in a way the opposite of Reputation Squatting ® . Reputation squatting® occurs when an organization takes on some or all of the name of a better-known organization that has a positive reputation, when there is no actual relationship between the organizations. The intent is to use the organization’s name to imply a relationship, and thus free-ride on the benefits of the famous organization’s reputation. (The Princeton Review college-preparation business squats on the reputation of the prestigious Princeton University.)

Collateral Reputation Damage is often unfair.

Although there are some ways that damage to an organization can be unintentional and also appropriate, the term “Collateral Reputation Damage” should be reserved for times when the organization is most likely innocent, and thus undeserving of the damage.

Why do I have a ® symbol next to the term Collateral Reputation Damage®?

Hey, I’m still an academic. When I coin and develop a new, useful construct, I still want to have the idea linked to my name. So, go ahead- use the idea; just link back to the source.