Corporate Irresponsibility: America's Newest Export

Corporations are often so focused on making short-term profits for their stockholders that they behave in ways that adversely affect their employees, the environment, consumers, American politics, and even the long-term well-being of the corporation, says Lawrence Mitchell in this provocative book. This is a significant issue not only in the United States but also in the world, for many countries are beginning to emulate the American model of corporate governance. Mitchell criticizes this emphasis on profit maximization and the corporate legal structure that encourages it, and he offers concrete proposals to bring about more socially responsible corporate behavior.

Mitchell declares that managers should be freed from the legal and structural constraints that make it difficult for them to exercise ordinary moral judgment and be held accountable for their actions. He suggests, for example, that earnings reports be required annually rather than quarterly, that the capital gains tax be increased on stocks held for fewer than thirty days, and that elections of corporate boards of directors be held every five years rather than every year. Mitchell places the problem of corporate irresponsibility within the broader context of American life and demonstrates the extent to which contemporary corporate behavior represents a corruption of our cherished liberal values of personal freedom and individuality.

Lawrence E. Mitchell is John Theodore Fey Research Professor of Law at The George Washington University and the director of the Sloan Program for the Study of Business in Society.

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