As Chapter 5 described, key to the successful implementation of corporate purpose are relationships. There are two types of relationships that are particularly important to companies—relationships with their financial institutions and governments. These require real commitments on the part of all three parties to the establishment of durable partnerships. But the law, regulation, and taxation frequently stand in the way.
Unilever’s corporate purpose and values illustrate this. ‘Our corporate purpose states that to succeed requires “the highest standards of corporate behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact”.’1 ‘Our values define how we do business and interact with our colleagues, partners, customers, and consumers. Our four core values are integrity, responsibility, respect, and pioneering. As we expand into new markets, recruit new talent, and face new challenges, these guide our people in the decisions and actions they take every day.’
Contrast these inspiring vision and values of a commonality of private and public purpose with the objects of Unilever’s articles of association: ‘The objects for which the Company is established are to acquire interests in companies and business enterprises and to manage and finance companies and business enterprises regardless of whether these are group companies and to do all things which, directly or indirectly, may be deemed to be incidental or conducive thereto in the widest sense.’2
What would you as a customer, employer, supplier, neighbour, or citizen, let alone corporate lawyer, make of these objects as assurance of Unilever’s commitment to uphold its noble purpose and values? Not much I suspect. And therein lies the fundamental problem with the defining determinant of the nature of the corporation—corporate law. It provides no persuasive principle on which to promote public prosperity in partnership with private purpose. In other words, vacuous statements of values create a vacuum in social contracts that companies cannot credibly fill themselves.
The law is at fault, but law is not the only culprit. As Chapters 9 and 10 describe, regulation and taxation as well as the law frequently stand in the way of the formation of durable partnerships between companies, financial institutions, and the state. But, since the law, regulation, and taxation are all human constructs, there are remedies at hand to reform corporations to the benefit of both them and us.