The Corporation

150 years ago

the business corporation

was a relatively

insignificant institution.

Today it is all pervasive.

Like the church

the monarchy

and the communist party

in other times and places

the corporation is today's

dominant institution.

This documentary

examines the nature

evolution impacts and

possible futures

of the modern

business corporation.

Initially given a narrow

legal mandate

what has allowed today's

corporation to achieve

such extraordinary power

and influence over our lives?

We begin our inquiry as

scandals threaten to trigger

a wide debate about the lack

of public control

over big corporations.

I think there is an overhang

over the market of distrust.

Listen 95 percent

or some percent

huge percentage

of the business

community are honest

and unreveal

all their assets

got compensation

programs that are balanced.

But there are

some bad apples...

the media debate about

the basic operating principles

of the corporate world

was quickly reduced

to a game of

follow the leader.

I still happen to think

the United States

is the greatest place

in the world to invest.

We have some shake ups

that are going on

because of a few

bad apples.

Some people call me

a bad apple

but I may be bruised

but I still taste sweet.

Some people call me

a bad apple

but I may be the sweetest

apple on the tree.

These are not just

a bunch of bad apples.

This is just

a few bad apples.

This is not just

a few bad apples.

You've gotta get rid

of the bad apples

You can start

with Tyco

Bad apples

We know all

about WorldCom.

Bad apples

Xerox Corporation.

Bad apples

Arthur Anderson.

Bad apples

Enron obviously

bad apples.

K- mart Corporation

Bad apples

the fruit cart is

getting a little more full.

I don't think it's just a

few apples unfortunately.

I think this is the worst

crisis of confidence

in business.

What's wrong

with this picture?

Can we not pick

a better metaphor

to describe the dominant

institution of our time?

Through the voices of CEOs

whistle blowers

brokers gurus and spies

insiders and outsiders

we present the corporation

as a paradox

an institution which

creates great wealth

but causes enormous

and often hidden harms.

I see the corporation

as part of a jigsaw

in society as a whole

which if you remove it

the picture's incomplete.

But equally if it's

the only part

it's not going to work.

A sports team.

Some of us are

blocking and tackling.

Some of us

are running the ball

some of us are

throwing the ball.

But we all have

a common purpose

which is to succeed

as an organization.

A corporations

like a family unit.

People in a corporation work

together for a common end

Like the telephone system

it reaches almost

everywhere.

It's extraordinarily powerful

it's pretty hard to avoid.

And it transforms

the lives of people

I think on balance

for the better.

The eagle

soaring clear eyed

competitive

prepared to strike

but not a vulture.

Noble visionary majestic

that people can believe in

and be inspired by

that creates such

a lift that it soars.

I can see that being

a good logo

for the principled

company.

Okay guys

enough bullshit.

Corporations are

artificial creations.

You might say

they're monsters

trying to devour as much

profit as possible

at anyone's expense.

I think of a whale.

A gentle big fish

which could swallow you

in an instant.

Dr. Frankenstein's creation

has overwhelmed and

overpowered him.

As the corporate form

has done with us.

The word corporate gets

attached in almost

you know in a

pejorative sense to

and gets married

with the word agenda.

And one hears a lot about

the corporate agenda

as though it is evil

as though it is an agenda

which is trying

to take over the world.

Personally I don't

use the word "corporation"

I use the word business.

I will use the word

use the word company.

I will use the words

business community

cause I think that is a much

fairer representation

than zeroing in on just

this word corporation.

It's funny that I've taught

in a business school

for as long as I have

without ever having

been asked so pointedly

to say what I think

a corporation is.

...it is one form of

business ownership...?

It's a group of individuals

working together to serve

a variety of objectives.

The principal one

of which is earning large

growing sustained

legal returns

for the people who

own the business.

The modern corporation has

grown out of the industrial age.

The industrial age

began in 1712

with an Englishman named

Thomas Newcomen

invented a steam driven

pump to pump water

out of the English coalmine

so the English coalminers

could get more

coal to mine

rather than hauling

buckets of water

out of the mine

It was all about productivity

more coal per man hour.

That was the dawn of

the industrial age.

And then it became more

steel per man hour

more textiles

per man hour

more automobiles

per man hour

and today it's more

chips per man hour

more gizmos per man hour.

The system is basically

the same system

producing more

sophisticated products today.

The dominant role of

corporations in our lives

is essentially a product of

roughly the past century.

Corporations were originally

associations of people

who were chartered

by a state

to perform some

particular function.

Like a group of people

want to build abridge

over the Charles River

or something like that.

There were very few

chartered corporations

in early United

States history.

And the ones that existed

had clear stipulations

in their state

issued charters

how long they

could operate

the amount of

capitalization

what they made or did

or maintained

a turnpike whatever was

in their charter

and they didn't

do anything else.

They didn't own or couldn't

own another corporation.

Their shareholders

were liable.

And so on.

In both law and the culture

the corporation was considered

a subordinate entity that was

a gift from the people

in order to serve

the public good.

So you have that history

and we shouldn't

be misled by it

it's not as if these

were the halcyon days

when all corporations

served the public trust

but there's a lot

to learn from that.

The Civil War and the

Industrial Revolution

created enormous growth

in corporations.

And so there was an explosion

of railroads

who got large federal

subsidies of land.

Banking heavily

manufacturing

And corporate lawyers

a century and a half ago

realized that they needed

more power to operate

And wanted to remove some

of the constraints

that had historically been

placed on the corporate form.

The 14th amendment

was passed

at the end of the Civil War

to give equal rights

to black people.

And therefore it said

No state can deprive

any person of life

liberty or property

without due process of law.

And that was intended

to prevent the states

from taking away life

liberty or property

from black people

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