Apple, the company that makes those skinny overpriced laptops, has adopted certain corporate practices intended to forestall the Earth becoming an inhabitable wasteland. With apologies to Douglas Adams, this has made a few people very angry, and is regarded by them as a bad idea.
The proposed resolution, requiring that Apple abandon sustainability initiatives that reduce the return it delivers to shareholders, is notable also as an example of the contradictions of reaction and capitalism in action. This story involves an ostensibly pro free-market, anti-regulation pressure group demanding that a public corporation take a particular action and being told by that corporation to, in essence, let the market solve.
Beyond the novelty of a shareholder resolution lies one of the more interesting differences between the law school corporation, and the living, breathing, publicly traded corporation. Shareholder pressure and attempts to exert control on the course of the business are the obvious impetus of corporate change in Bizorgs 101, but in the real world, the ease with which shares in public corporations can be bought and sold results in those sorts of actions being the exception rather than the rule. In an amusingly absurdist turn of events, the mechanism for corporate control by shareholders built into the corporate form is abandoned by shareholders in favour of the logic of the market, where even business judgement is transformed into a commodity that can be bought and sold.
In a development that would make Zizek proud (if that’s an emotion he’s capable of), Apple has successfully defended it’s “progressive” choice to pursue sustainability at the possible cost of profit by reference to the very principles of corporate law and market operation that have created the need for environmental action in the first place. Say what you will about the contradictions of capitalism, but you can’t tell me it doesn’t have a sense of humour.
Great post Mathew.
It’s not lost on the directors that “green” is fashionable and any movement in that direction will, in the current climate (hehe), probably only drive prices up and make their business more profitable.
At the end of the day, both People’s and BCE v 1976 Debentureholders tell us that when evaluating what’s in the best interests if the company the board may consider, inter alia, the interests of shareholders, EEs, suppliers, creditors, consumers, gov’t and THE ENVIRONMENT.
While I do believe that this move will actually be profitable, even if it does cause them to lose a bit of money, the courts seem to be erring on the side of deference to the business decisions of those managing the company.
I agree, Cait. “Green-washing” is good for business. It can have the appearance of a company acting in an altruistic way and thus creates a distance between them (Apple) and the other guys (Big Bad Wolf CorporationX).
Tim creates a nice soundbite and free press while shareholders get to feel satisfied about their green investments/purchases; but, I would speculate there is little to no shareholder follow-up regarding the implementation of any sustainability. As we talked about earlier on, one of the reasons the corporation is a efficient organization is that it allows for apathetic shareholders.
~feeling great about climate change as I type on my MacBookPro
This is a great post with insightful comments, but Matthew gets extra applause for the memorable title and the Douglas Adams shout-out. The situation with Tim Cook and Apple’s sustainability programs is intriguing because it’s in some ways a reversal of the headline we’re more used to seeing – namely, corporations not being very altruistic in their activities, but trying their best to spin themselves as humanitarian anyway to reap the profits, via tactics like “green-washing” and other marketing manipulations. Instead, what we have here (possibly) is actual profitability being sacrificed—or at least, prioritized a little less—for the sake of bigger and more noble social goals, to the point where unrest and discomfiture have started to brew. Consumers are used to being skeptical of benevolent behaviour on the part of corporations since it’s usually aimed at generating more profit, so it’s interesting to see a shareholder be skeptical and perhaps even alarmed for the opposite reason.
A cut-throat defence here for Apple management might also be to bolster the reasonability of their business decision by pointing to the many fires (the Irish tax scandal, the continued suicides at their manufacturer Foxconn’s factories) which such a “green” announcement directs attention away from — although admitting this would be to undermine the point of the announcement as a distraction in the first place, so I would imagine it would be a last-ditch, in-court defence. In that sense, it might also be the decision that is actually best for the shareholder interests, and so we are brought back again to the issue of balancing the power of the directors to drive the corporate car against the ability of the backseat driver shareholders to shout directions and drive-through orders from the rear (when they can muster together enough will/attention from amongst their lethargic car-nap).