Unchecked corporate power sits at the root of nearly every progressive issue of our time. Financial deregulation and low union density, among other things, have contributed to skyrocketing corporate profits while wages remain relatively stagnant in comparison to the inflated cost of living. Climate change driven by an underregulated fossil fuel industry is increasing the frequency and intensity of climate disasters across the United States. And across the board, corporate capture of public institutions has allowed big business to wield outsized influence on key issues important to the American people from health care to privacy. To tackle the pervasive nature of corporate power and build a rights-based economy that works for everyone, we need a comprehensive push for corporate accountability. To do this, we need a clear agenda calling for change that unites advocates working across the variety of issues impacted by corporate power.
HOW DID WE GET HERE
The turn of the 20th century saw an explosion of efforts aimed at reining in corporate power, including pushes for better labor practices and the enactment of antitrust legislation. But these gains have since been steadily eroded. Since the peak of union membership in the 1950s, union power–and wages–have declined compared to economic output. By the 1970s and 1980s, market deregulation, tax cuts for the wealthy, and antitrust policies that ignored the impact of corporate power began dominating economic policy in the United States. At the same time, private sector interests began an organized endeavor to strengthen corporate influence over American culture and politics. This effort was marked by the Lewis Powell Memo of 1971 to the U.S. Chamber of Commerce strategizing a coordinated response to growing criticism of corporate behavior. The globalization of corporate supply chains has further obstructed accountability for abuses by keeping the web of factories, subsidiaries, contractors and subcontractors opaque and increasingly complex.
In the 1990s, as global markets rapidly opened alongside the emerging age of the Internet, widespread publicity of egregious corporate abuses spurred public outrage. Initial attempts of implementing voluntary corporate initiatives aimed at galvanizing more socially and environmentally responsible business conduct proved insufficient to meaningfully change corporate behavior. By the early 2000s, a “Business and Human Rights” movement emerged that focused on developing mandatory legal safeguards against corporate abuse. Following coordinated civil society advocacy efforts, in 2011, the Human Rights Council adopted the non-binding U.N. Guiding Principles on Business and Human Rights (UNGPs) outlining three pillars to address business-related human rights harms including the State duty to protect human rights, the corporate responsibility to respect human rights, and the right to remedy.
AN INCLUSIVE FRAMEWORK FOR CORPORATE ACCOUNTABILITY
But until now, over a decade after the creation of the UNGPs, there has been no concerted effort to compile the diverse ideas of the business and human rights community into one location or frame the issues within a theory of corporate accountability that connects it to other movements fighting corporate power. In December 2023, the International Corporate Accountability Roundtable (ICAR) published a Corporate Accountability Agenda (“The Agenda”) that does just that.
The Agenda posits that meaningfully advancing corporate accountability requires both addressing corporate structural power and implementing legal safeguards needed to fight abuse. Corporations have successfully built global social and economic structures that allow them to concentrate their unchecked power and wield that power to further their own interests. Because of lax regulation on corporate consolidation and tax policies that allow companies to avoid paying their fair share, big businesses are able to accumulate vast amounts of wealth. Moreover, stakeholders who have the greatest interest in corporate decision-making, such as workers and impacted communities, are left out of the conversation. Rather, corporations have increasingly prioritized large payouts to shareholders over other more socially productive uses of corporate profits. The resulting resource inequities provide corporations with a steep advantage in nearly every area of advocacy, allowing companies to influence our politicians to craft laws in their favor and stymie efforts toward enacting the legal safeguards needed to hold corporations accountable for abuses.
Enacting effective legal safeguards means that the government must impose mandatory requirements and establish enforcement mechanisms to address abuses. These enforcement mechanisms should include systems of liability that can compel human rights and environmental due diligence, impose civil and criminal liability, provide remedy to victims, and prohibit violators from accessing U.S. markets. To make these enforcement mechanisms effective, the government must also require businesses to disclose key information about their value chains, business practices, and human rights impacts. To advance corporate accountability, we can make commonsense expansions to existing constraints on corporate behavior and establish incentives and disincentives that can limit corporate abuse. Although no one measure can fully achieve corporate accountability on its own, each piece works together to advance the whole. Corporate accountability means fighting excess corporate power and placing that power back in the hands of the public.
BUILDING A BROADER COALITION
Nearly every issue across progressive movements would benefit from curbing corporate power and improving legal safeguards against abuses. This is because corporate tyranny impacts everyone. Corporate power plays a role in worker’s wages, healthcare, climate justice, and democracy, and when corporations can put profit over people without consequence, workers, the planet, and the democracy suffer.
Workers have a lot at stake when it comes to corporate power. Corporate impunity for engaging in union-busting tactics suffocates workers’ rights to freedom of association and collective bargaining and tramples on essential protections for workers. Shareholder primacy and short-termism means that corporations are less likely to reinvest profits in long-term research that could build a more sustainable future and deprives workers of living wages, decent working conditions, and a say in their own labor. Women workers, workers of color, and migrant workers not only face the brunt of these corporate failures, but are also, in some cases, targeted for exploitation and excluded from key protections.
The planet faces the consequences of unchecked corporate power too. Mining, logging, and drilling not only can displace and endanger local communities, but they also contribute significantly to pollution and accelerate the devastating impacts of climate change. The unmitigated drive for profit allowed oil companies like Exxon to downplay their role in global warming, despite clear warnings from their own researchers. Even less obviously polluting sectors, like the fashion industry, produce 10% of all humanity’s carbon emissions and operate as the second-largest consumer of the world’s water supply. This means that the climate movement has a strong interest in promoting corporate accountability too.
The entrenchment of private sector influence in U.S. politics expands the reach of corporate power exponentially. Not only does this leverage mean that corporate interests can weaken regulations meant to keep corporate power at bay, it also means that corporations can manipulate all kinds of legislation. This includes lobbying against student loan forgiveness, contributing to the campaigns of anti-LGBT legislators, or utilizing revolving door tactics to bolster the private prison industry and perpetuate mass incarceration. This corporate capture of our politics poses a massive barrier to fair public advocacy across nearly all issues, making this a problem that impacts everyone.
Corporate interests have consistently pushed their own agenda—and with relative success. Over the last century, we have seen the slow erosion of the right to unionize, the de-regulation of corporate operations, and the unchecked consolidation of corporate political power. But to build a rights-based economy that works for everyone, we need a coordinated effort across the varied progressive movements that recognizes our shared interests in holding corporations accountable and stemming corporate power. Combining our efforts under an umbrella of corporate accountability and outlining a clear Agenda can serve as a starting point for forging a stronger, broader coalition that can propel us toward a better future that empowers workers, families, and impacted communities and builds public power.
Read the full Building a Rights-Based Economy: A Corporate Accountability Agenda here.