Tuesday, August 16, 2011
Royal Dutch Shell sprung a leak in the North Sea recently. Once again, a tsunami of criticism has evolved. While we did not come to the defense of British Petroleum (BP) and TransOcean last year in connection with their problems in the Gulf of Mexico, we noted that....
© 2010 and 2011, the Institute for Applied Common Sense
Yesterday, C-Span aired Tuesday’s Senate hearings in connection with the Gulf of Mexico oil “spill,” which is still spilling.
It was interesting to watch the corporate representatives, including the CEO of BP America, perform mental and legal gymnastics in responding to the questions. The world watched as Senators, on both sides of the aisle, posed questions reflecting their incredulousness that this “disaster” even occurred.
While we were impressed with the tap dancing on the part of the spokespeople, we were more impressed with the political savvy of the Senators. President Obama was justifiably incensed at the multi-lateral finger pointing going on, but, we submit, for all the wrong reasons.
We’re willing to bet, and even invest some money in the derivative ultimately crafted, that in the years to come (be it 10, 50, or 100), (1) “accidents” of this type will continue to occur, (2) the companies involved will be no more prepared to deal with them and their consequences, and (3) Senators investigating future accidents will continue to fake their incredulousness that such “accidents” still occur.
Many things in life have less to do with people or the humans who happen to exist at any given point in time, and more to do with the structure or organization within which they function.
We here in America, for a variety of psychological, historical, legal, and systemic reasons, have a “perverted” sense of “corporate responsibility.”
First of all there really is no such thing as “corporate responsibility.” In America, if a corporation screws up, it’s generally going to pay. Being a responsible corporation or a good corporate citizen is only pursued to enhance the bottom line. The consequences of the screw up are generally based on the particular screw up, and even punitive damages can’t be avoided by a “good corporation.”
Second, those Senators asking questions are pretty savvy. They are well aware that a corporation is a legal fiction. They also know (although you might have difficulty believing it considering the way they run the government) that in conducting business, the goal of that entity is to generate profits and try to stay afloat.
Third, and most important, every corporate decision is made in an effort to maximize profits, and is theoretically an educated and calculated guess. However, the reality is that some of the guesses are going to be wrong. Corporate management knows, and the Senators should know, this dirty little secret.
The rest of society apparently does not.
And so we dump on corporations when there is a screw-up, accuse them of mismanagement and devious, under-handed activity, and then slap our jaws and open our mouths with our eyes all bugged (like the kid on “Home Alone”), when the 27th screw-up occurs.
A corporate entity does not have a mind or a conscience similar to that of a human.
Repeat: A corporate entity does not have a mind or a conscience similar to that of a human.
Even though humans run corporations, corporations are separate and apart from humans, somewhere between a human and an inanimate object.
Whereas a human will occasionally make a judgment call against his or her personal interests in pursuit of other goals (like unprotected sex with a stranger), rarely will a corporate entity do so because it is not really its money. It's not even the money of the folks managing the company, at least in the case of a publicly traded corporation.
It is the money and interests of others, the shareholders, which are at risk, not that of the decision makers.
It makes for a unique dynamic.
As a result, fines, penalties, and lawsuits (which are quantifiable and really only about money, not lives) have to be figured into the economic mix as necessary evils.
An entity may try to minimize them, or even delay them if possible, but they know that they are always just around the corner. Corporate management recognizes this for what it is.
They keep this in mind when they're engaged, and then walk away from it and try to live a human life.
Speeches, press conferences, hearings, investigations, fines, and lawsuits, are all perversions designed to distract us from really getting to the root of the matter. Talk about irresponsibility.
If you really want to know what’s going on, talk to the bean counters. It’s all about probabilities and risk management. It’s not about humans, wild life, or the environment.
It’s about time that we recognize that, and then get on with the business of trying to reduce, not eliminate, such “accidents” from happening in the future.
Corporations are not human. They can't be. It's an inherent conflict of interest.
If they don’t make enough in the way of profits, they will not have any put away for a rainy day, or to respond to the fickle changes in consumer tastes.
And as they pass through St. Peter’s bankruptcy gates, we’ll accuse them of mismanagement and sleeping at the switch.
And that ain’t no BS.
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