Corporations have been an intrinsic part of America since the industrial revolution. When they initially grew, so did the realization that a larger power must somehow be able to oversee them and set any necessary limits on the power of these companies.
While the federal government was able to restrain most initial corporations from overstepping their boundaries, that has become much more complicated in our time as corporations become international businesses and can operate in places where they have the freedom to run their business how they seem fit, instead of following laws created by the federal government. You can read more about corporate governance here.
In this article, I’ll examine current issues for corporations in the United States, mainly how and why they should be more socially responsible, and the relation it has to current federal laws.
Competitive job market
In the United States, a competitive job market usually exists. What I mean by this statement is that there are lots of different companies an employee can seek an opportunity from, so the employee has their choice of companies. Because of these options, employees are more likely to search for a company that shares their values.
These new members of the workforce are also generally younger, and the millennial generation cares deeply about the ethical treatment of other people, the environment, and various other social issues. These workers have the chance to find a company that reflects these ideals. If a company doesn’t, the corporation is less likely to find a younger team.
Investors are beginning to care more about whether or not a company functions ethically as well. They believe that companies who are mindful of their environmental and ethical impact are more likely to succeed and be upfront about company news.
There’s a greater demand for transparency from investors, who really want to know where their money is going and how it’s being used. Investors have complete control over whether or not a corporation is successful, so it’s important for the company to known that are issues that investors care about.
It’s becoming more and more common for customers or clients to care about whether or not a corporation’s practices are ethical. People are concerned with ethical business practices as they become more aware of the world around them and the various issues that occur.
It’s easy for someone to see and read about how sweatshops affect local workers or the damage some business practices cause to the environment. Many customers are willing to put the research in to learn whether or not a company they support follows ethical business practices. If that company doesn’t, it’s likely that the customer or client will take their business elsewhere. Customers are also the people who drive the demand for new legislation to regulate how a corporation operates. By first adhering to what customers want, a business can avoid complicated federal regulations in the future.
Finally, it’s important for corporations to follow ethical business practices because resources are incredibly limited. Instead of using or harvesting fossil fuels, it’ll be more beneficial in the long-run to utilize alternative sustainable energy sources. It may initially be more expensive, but it’ll cut costs down the road.
New laws and regulations are being passed to control the amount of fossil fuels used in business. The federal government has been offering corporations incentives to cut down on the non-sustainable resources they use and it’s a great time to take part in this movement. It’ll be good for your business and the environment!