Corporate Charades

Part 3 of 3: All the Rest

The first two essays were about corporations’ pretenses of being ethical and of being socially responsible respectively by having programs bearing those names, all the while their normal corporate behavior is unethical and socially irresponsible. This third and last essay in the series shines a brief “slime light” on all the rest of the charades corporations have in their bag of dirty tricks. They are in this order: philanthropy, general counsel, governance, investor relations, public relations, advertising and marketing, customer relations and service, human resources and employee relations, and finally, the biggest charade of them all, corporate personhood.

Philanthropy

“Philanthrôpía,” to the ancient Greeks meant “love of humanity.” Turning this ancient meaning on its head and vulgarizing it is “corporate philanthropy.” Its roots in America can probably be traced to the robber barons of the Gilded Age. They robbed America and gave a tiny bit back, perhaps as guilt gifts, but more likely as insurance against civil revolt as millions of Americans were in abject poverty, just as they are today. Corporations now, with the aid of our government, are the robber barons of the Ruinous Age because they are robbing America and the world while ruining all facets of ordinary life.

The most honorable form of giving may be anonymous giving that makes a positive difference, but there is nothing anonymous or positive about corporate giving. Corporations can’t get their tax benefits if the government doesn’t know they gave. And the public wouldn’t know, which is, of course, why corporations trumpet their philanthropy. They trumpet it as their benevolent gesture to society hoping it will mask their harmful and often deadly malevolence.

As a case in point, let’s pull back the charade’s curtain at Wal-Mart, one of the wealthiest corporations in the world that is also at or near the top of philanthropic giving. It hardly reflects a “love of humanity.” Here is a sample of what can be read about this corporation’s treatment of humanity: It threatens to shut down stores in areas where a living wage law might be passed; fires workers who strike for fair pay, decent working conditions, and respect at work; pays below poverty-level wages, forcing many employees to get state-funded health care and overall to collect a $2.6 billion in taxpayer-funded welfare annually; pressures employees to work overtime without pay or risk being fired; trains managers to falsify time sheets or not pay employees for all the hours they worked; forces higher-paid, full-time employees to work  inconvenient  shifts to get them to quit; buys from suppliers purring workers in sweatshops and deadly fire traps; quashes an internal investigation of a major bribery involving a foreign subsidiary; etc.; etc. In sum, “Wal-Mart,” says Paul A. Samakow, an attorney, “is the poster child for despicable behavior” (Mr. Samakow is living proof that not all lawyers are unsavory).1

Wal-Mart would just as soon keep the curtain closed on another fact. It isn’t about to tell the public that the corporation’s giving is embarrassingly tiny considering its total assets (if my data and figuring are roughly accurate, the percentage of corporate gifts to total assets is half a percentage point).

Before moving on to the next charade, I want to point out that the “non-profit industrial complex” could not exist without funding from corporate philanthropy or the tax exempt status of both that is given by our government. This complex is the corpocracy’s clever way of moderating resistance to it and to making social reforms by the complex its own charade. I will have more to say about this complex, an off-spring of the Devil’s Marriage between corrupt corporations and corrupt government, in a separate essay sometime later.

General Counsel

Some countries apparently have no lawyers. America has thousands of all kinds, and the latest figures I could find show nearly 70,000 working in corporate legal departments. The charade is that these departments help ensure that corporate behavior is legal behavior. The reality is that corporate lawyers are always looking for ways to make corporate behavior look legal that is or should be illegal, and if illegal and caught, to ensure that their corporations get as much immunity as the government will give, which is always plenty.

Even if corporate lawyers abided by their professional code and guided their corporations on a legal path, doing business legally isn’t enough. There are two reasons why. Politicians, most of whom are lawyers, define laws very narrowly and/or riddle them with loopholes so that what should be illegal isn’t. Secondly, a business action can be on the right side of the law, the minimal standard, but on the wrong side of ethics, the higher standard. The adage that no one is above the law, therefore, is unwittingly perverse and no different from the rationalization that anything goes as long as it’s legal. Just the opposite is true. Everyone should be above the law, way above it. Or as St Paul admonished the Galatians, “… no one is put right by doing what the law requires.”

Are you wondering about Wal-Mart’s legal department? In 2012 the corporation merged its compliance, ethics, investigations and legal offices into one organization answering to the company’s general counsel.2 Wal-Mart employs hundreds of  in-house and “out-house” lawyers. It has to. It’s a lighting rod for lawsuits, attracting “nearly one every two hours, every day of the year” and fighting the plaintiffs tooth and nail. 3 Whenever it can the corporation, true to form, tries to skimp by hiring the out-house lawyers. 4

Governance

Corporations would like us to believe that they are governed by their boards of directors as representatives of their owners, the shareholders. That is a charade/myth that needs to be shattered into its two pieces of reality.

1. Boards of Directors

I call them “warped” boards and for good reason. They don’t represent the shareholders. Board members are the handpicked representatives of the board’s chair, usually filled by the imperious CEO. They hold the wrong view of what corporate performance should mean; “choose” the wrong CEO; let the corporation be misled and mismanaged; and allow lavish rewards for the wrong performance. With this kind of board in place the wrong kind of performance gets a head start and never looks back.5

2. The “Owners”

Two very different types of marketplace co-exist in America . In the first transactions involve real goods and services. In the second transactions involve using money to make more money. An ancient thinker on economics, Aristotle, was very disdainful of the second type. So should we all.

It is a travesty to treat speculators fixated on corporate quarterly earnings as the “owners” of corporations in which they invest. Speculators care only about tomorrow’s stock price and not at all about the corporation’s longevity and well-being of its other stakeholders (like employees and the communities where corporations are located). Moreover, the “owners” don’t have to worry about corporate criminality, shielded from it as they are by the absurdity of limited liability granted long ago by whom else but politicians.

The few conscientious shareholders worried about their corporations’ conduct and who attend annual board meetings might as well stay home. The meetings are staged from beginning to end. And these shareholders might as well not sue the corporation’s directors and executive officers because these miscreants have bought liability insurance that shields their corporations and them from the financial consequences of many illegal acts.6

Hedonistic speculators are one reason corporate executives resort to all sorts of wrongdoing. Veteran reporter of banking and finance news and former editor of US Banker, Robert A. Bennett, concluded after more than forty years of accumulating anecdotal evidence that the pressure of consistently showing increases in quarterly earnings leads to cutting ethical corners in order to “hit the numbers” promised and expected. 7 That conclusion is a common one among critics of corporations and casino capitalism.

Investor Relations

Corporations, through their investor relations people, “relate” to current and prospective shareholders.  The charade is the corporate pretense that these people tell the investment community the good and the bad about the corporation when the reality is that the good is exaggerated and the bad is omitted or explained away. Not that it matters about the bad news, though. Speculators couldn’t care less about financial success wrongfully achieved, and corporations with their mendacious financial disclosures have little to fear from the lax oversight of the Securities Exchange Commission and the lame Sarbanes-Oxley Act tied to the SEC.

Public Relations

Corporate PR departments ought to be called BS departments. Like their investor relations’ cousin, PR people exaggerate the good and omit or explain away the bad.

There’s an old saying that “it takes years to build a reputation and just hours to destroy it.” Corporate PR people undoubtedly fret often about the reputations of their corporations’ products and conduct. That amounts to a lot of fretting because America, Inc. has a lousy reputation.

Again, Wal-Mart is a good case in point. It is constantly launching PR initiatives to put some gloss on its reputation. Wal-Mart is well aware of news and gossip to the effect that “people love to hate Wal-Mart.” But being that its prices are so low and millions of Americans are so poor, does its reputation really play much of a factor for this retail giant?

A second case in point is the oil giant, BP. It has launched a massive public relations offensive to portray themselves as the victims, not the cause, of the massive oil leak in the Gulf of Mexico. After seeing how many legal claims had been filed against it, BP started discrediting the claims process, saying that it is absurd and unfair, and that BP had already adequately compensated victims of the oil spill.8

Advertising and Marketing

The charade being played by advertisers and marketers is that you will get exactly what they are saying you will get. If you believe them you are a chump, and they hope you will be a customer chump.

I once reviewed a book about deception in the market place.9 The authors, three marketing professors, define marketplace deception as “an intentional attempt by the deceiver to persuade through concealment, fabrication, and/or manipulation of information the intended target to believe the false value of a product or service offered” (I told you they were professors). The book, with one exception, wasn’t an eye opener for me because I wasn’t born yesterday. What surprised me as a psychologist was how some marketing agents rely on basic research findings, sometimes from the fields of social and cognitive psychology to start crafting the elements for the variety of deception tactics they have on hand. One such tactic, for instance, is that of using gimmicks reported in the psychological literature as being the kind that will successfully distract prospective buyers while the legally required disclosures are being made about the possible defects of, or harm from, the product under consideration. In other words, put the legal stuff in very fine print.

“Let the buyer beware” says it all. You don’t need me, a psychologist, or marketing professors to tell you that.

Customer Relations and Service

The charade here is that corporations treat their customers fairly and courteously throughout all points of the exchange: shopping, buying, warranty service, repairs/refunds and complaint handling. That makes for a lot of opportunities to alienate actual and potential customers, and my guess is that few corporations try hard enough or even want to try hard enough to make all exchanges a positive one for everyone. Automating service calls and outsourcing the contacts to people for whom English is a challenge, for example, is a sure way to anger me at least.

Human Resources and Employee Relations

These two charades are sometimes managed together by corporations so I am putting the two together here.

1. Human Resources

The charade here is that employees are treated as humans instead of as expendable resources like oil. And despite what HR professionals may tell you, they are near or at the bottom rung of factotums in the management staff functions of corporations.

I leaped at the chance more than a decade ago to review The Dilbert Principle in which author Scott Adams narrates his comic book creature, Dilbert, who, the publisher says on the book’s jacket “has become the poster boy of corporate America [where] millions of office dwellers tack the comic strip to their walls when murdering the boss is not an acceptable option.”10 My favorite character, actually is Alice, one of Dilbert’s beleaguered colleagues, who shouts “we’re human beings, not resources!”

HR departments do the paper work in processing the exploitative decisions of line managers and executives to outsource work; to lay off or fire employees; to make indefensibly bad performance evaluations of subordinates; to pay paltry wages; to renege on pension plans; to compensate executives astronomically above their real worth, if any, to the corporation; etc., etc. Can you just imagine the HR work being done at Bentonville, Arkansas, the headquarters of Wal-Mart?

2. Employee Relations 

The charade here is that the corporation has its employees’ best interests at heart and unequivocally acknowledges and supports employees’ collective bargaining rights. Tell that to the employees of Wal-Mart who have tried to form a union! If you can name me a corporation that does not resist unionization, please tell me. Management and labor mix like oil and water.

The Biggest Charade of All

I wrote at the outset of the first essay in this series that “When you think about it, the entire corporation is a charade, not just particular parts of it. The U.S. Supreme Court farcically ruled in 2010 that corporations are persons. People who really believe that carry on conversations with stuffies. If only corporations were as benign as stuffies!”11

I wrote a few years earlier in The Devil’s Marriage that “Shielded by the Supreme Court corporations are allowed to get away with all sorts of harmful wrongdoing,” and that “Corporations haven’t been granted Constitutional ‘rights.’ They have been granted Constitutional ‘wrongs’ by a succession of wrongful arguments by corporate lawyers and wrongful decisions by the judiciary. As absurd as personhood is, getting rid of it amounts to having to expunge the word ‘corporation’ from the Constitution that’s not even in it, and yet it just may be the most formidable challenge of all initiatives to curb corporate power and its abuse.”12

Closing Remarks

Adding the nine charades discussed here to the two charades that were the topics of the first two essays leaves us with a shell of a corporation, exposed as if it were “the emperor with no clothes.” Unfortunately, though, corporate America is more imperious and ruinous than ever before. I have written exhaustively about how to end the corpocracy and so won’t consume space here to repeat the ideas (some 180 of them). 13

•  Read Part 1, Part 2

  1. Regarding Wal-Mart, see, e.g., Diane Sweet, Wal-Mart: “The High Cost of Low Price”, Crooks & Liars, November 17, 2012; David Macaray, “Walmart Bares Its Fangs“, Dissident Voice, February 15th, 2013; Kenneth Quinnell, “Walmart Shrimp Supplied By Workers In Slave-Like Conditions”, Crooks & Liars, April 25, 2012; Diane Sweet, “Wal-Mart Said ‘No’ to Paying for Fire Safety in Bangladesh”, Crooks & Liars, December 06, 2012; Dave Lefcourt, “A Culture of Corruption”, OpEdNews.com, April 23, 2012; Paul Samakow, “Suing Wal-Mart: Bad business practices lead to litigation”, The Washington Times. June 2, 2013. (Mr. Samakow “routinely battles insurance companies and big businesses”). []
  2. Market Watch, “Wal-Mart reorganizes compliance department”,  October 24, 2012. []
  3. Richard Willing, “Lawsuits a volume business at Wal-Mart”, USA TODAY, August, 13, 2001. []
  4. Opcit. []
  5. Gary B. Brumback, The Corpocracy and Megaliio’s Turn Up Strategy, Democracy Power Press (Kindle Edition), 2012. []
  6. Tom Baker & Sean J. Griffith, Ensuring Corporate Misconduct: How Liability Insurance Undermines Shareholder Litigation, University Of Chicago Press, 2011. []
  7. R. A. Bennett, “High Earnings, Low Ethics”, Chief Executive, 2002, 27-29. []
  8. Desmogblog, “BP Launches Massive PR Campaign To Demonize Oil Spill Victims”,  Crooks & Liars, August 28, 2013. []
  9. Gary B. Brumback, Review of the book by David M. Bousch, Marian Friestad, and Peter Wright, Deception in the Marketplace: The Psychology of Deceptive Persuasion and Consumer Self Protection, Routledge, 2009, Personnel Psychology Book Review Section, 2010, Autumn Issue, 63, 801-804. []
  10. Gary B. Brumback, Review of the book by Scott Adams: The Dilbert Principle, Harper Business, 1996. Personnel Psychology Book Review Section, 1997, Summer Issue, 50, 514-517. []
  11. Gary B. Brumback, The Devil’s Marriage: Break Up the Corpocracy or Leave Democracy in the Lurch, Author House, 2011. pp. 105-106. []
  12. Gary B. Brumback, “Corporate Charades, Part 1 of 3 Part Series:  Ethics Programs“, Dissident Voice, August 20; Cyrano’s Journal, August 20; OpEdNews, August 22; Uncommon Thought Journal, August 23, 2013. []
  13. Ibid. The Devil’s Marriage, for example. []

Gary Brumback, PhD is a retired psychologist and Fellow of both the American Psychological Association and the Association for Psychological Science. He is the author of The Devil’s Marriage: Break Up the Corpocracy or Leave Democracy in the Lurch. His most recent book is The Corpocracy and the Megaliio Corporation’s Turn Up Strategy. Gary can be reached at: democracypower@bellsouth.net. Read other articles by Gary, or visit Gary's website.