Summary of Firm Commitment

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  • Innovative

Recommendation

The corporation has immense potential for good, but it must reinvent itself. Corporate fraud, environmental disasters, collapsing industries and financial meltdowns have been common events since the beginning of this century. Corporate operation is fundamentally flawed, but most solutions ignore the complex realities of how corporations function and who they serve. In this important, challenging work, Oxford professor Colin Mayer philosophically examines the arcane policies that brought economies to the brink and explains how corporations can become powerful wealth-creating forces for social benefit. getAbstract recommends Mayer’s thoughtful – if sometimes a bit dry – essay to the layperson interested in financial systems and the inner workings of corporations, and to corporate leaders and government officials seeking to create better governance and regulatory policies.

About the Author

Colin Mayer is a consultant and a professor at the Saïd Business School, University of Oxford, where he served as dean from 2006 to 2011.

 

Summary

The Corporation: Past and Present

The 17th century founder of Barclay’s Bank, John Freame, built his company on Quaker principles. Hundreds of years later, Mayer Lehman, founder of Lehman Brothers, often took his children to visit sick, underprivileged patients in New York’s Mount Sinai Hospital. Both men held strong moral principles; they started their corporations to earn profits while providing social benefits for their communities.

The corporation is a unique, wonderful invention that enriches some, improves the lives of many, and restrains people’s purely self-interested motives while enabling national and global growth. At the same time, it inflicts suffering through mass layoffs, ruins communities and industries, destroys environments, and even wipes out species. Public corporations are now better organized for evil than for good. For instance, “a survey of 34 directors of US Fortune 200 companies reported that 31 of them would cut down a mature forest or release a dangerous unregulated toxin into the environment to increase corporate earnings.”

This is a symptom of the problem: In Anglo-American countries, scattered corporate ownership featuring...


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