The Code For Corporate Responsibility (California SB 917): An Idea Whose Time Has Come

By Nichole Su

A Litmus Test For All Political Candidates?

Since when do Rabbi Michael Lerner and the National Lawyers Guild of Los Angeles agree? How about author Thom Hartmann and Loyola Law Professor Robert Benson, on the pro and con sides respectively, of abolishing corporate personhood as a corporate reform strategy? Throw into this mix Marjorie Kelley, editor of Business Ethics magazine, and commentator Jim Hightower, as well as the National Alliance for Democracy, California NOW, Santa Cruz Green Party and Southern California Americans for Democratic Action. All of these individuals and groups are amongst those who agree that the Code for Corporate Responsibility (introduced in California as Senate Bill 917 by Senator Richard Alarcon) is an idea whose time has come.

The Code requires corporate directors to ensure that profits do not come at the expense of five elements of the public interest: (i) the environment, (ii) human rights, (iii) public health and safety, (iv) the welfare of communities and (v) employee dignity. Corporate attorney Robert Hinkley wrote a Model Uniform Code so that the Code for Corporate Responsibility can be adopted into the existing corporate codes of all 50 states. The Code consists primarily of 28 words whose insertion into existing law changes the purpose of corporations from simply "making money" to "making money, but not at the expense of the environment, human rights, the public health or safety, the communities in which the corporation operates or the dignity of its employees."

The Code is proactive. Unlike most corporate reform measures, it goes beyond withholding, threatening or punitive actions that take place belatedly after corporate malfeasance has already injured the public interest. It provides corporations with a positive direction to go. At the same time, the Code imposes strict liability on corporations and their directors if they violate the Code. It provides exemptions for small business, and a transition period for compliance. The Code presents no constitutional issues; to become law, it only requires passage by the state legislature and the signature of the governor. Endorsement of the Code (SB 917) should become a litmus test for all 2004 election candidates.

On October 28th, the Onion Tuesday Night Forum will feature Maria Armoudian, Senator Alarcon's legislative aide, who will speak on the Code (SB 917). On November 25th, the Onion will feature call-in speaker and Model Uniform Code for Corporate Responsibility author Robert Hinkley, who will speak on "The Next Step In Corporate Evolution."

The new ad hoc California Corporate Reform Working Group (CalCORE) works with state and national activists to enact corporate reform legislation, including the Code for Corporate Responsibility (SB 917). CalCORE seeks additional endorsers and activists to lobby state legislators at their district offices during the current legislative recess. See http://www.c4cr.org and http://www.citizenworks.org/enron/corp_code.php for more information about the Code or visit http://groups.yahoo.com/group/c4cr_california/.