Not so long ago, the role of a corporation was perhaps clearer than it is today. It probably wouldn’t have been so controversial a couple decades prior to saying that, within the bounds of the law and very basic ethical principles, a corporation’s role was only to maximize value for its shareholders.
Things change though. While there are certainly those who still ascribe to corporations the purpose of making money at the expense of just about anything else, private companies are nonetheless being called upon to focus on more than just the bottom line.
From a historical perspective, this shift makes some sense. In 2010, for example, a 5-4 majority of the United States Supreme Court reversed campaign finance restrictions on corporations that had stood for a century.
In the Citizens United casethe majority of the Supreme Court reasoned that the political speech of corporations should not necessarily be treated differently under the First Amendment compared to the speech of “natural persons.” But new rights come with new responsibilities — it would be naïve to think the public would accept that corporations could exercise the same rights as we natural persons without facing the same consequences for failing to do so responsibly.
Many attempts have been made in recent years, across the political spectrum, to hold corporations accountable for their statements, deeds, and positions. For some corporate leaders, this has translated into a renewed commitment to employees, the environment, and even suppliers as opposed to only shareholders. For Donald Trump, it meant asking his supporters to engage in dozens of boycotts of everything from Coca-Cola to Major League Baseball. For the most part, the market has been pretty good at sorting out reasonable versus unreasonable corporation actions without regard to baldly political crackling.
Today, with the crisis in Ukraine, we are facing the next stage in the evolution of corporate responsibility. Some businesses are not waiting for a public demand or public reprimand to help Ukraine or punish Russia. They’re just doing it on their own.
Nike, Apple, and IKEA quickly paused or canceled ongoing business activities in Russia following the breakout of hostilities. Tesla is allowing fleeing Ukrainians who own any type of electric vehicle to use its Superchargers, free of charge, in cities directly across the Ukrainian border. Tesla CEO Elon Musk also followed through with a promise to activate private spaceflight company SpaceX’s Starlink satellite internet service in Ukraine and to deliver a number of Starlink consoles to provide Ukraine with reliable internet access. Visa and Mastercard recently announced that they were suspending all transactions in Russia over the invasion of Ukraine. Even as some companies work with regulators to implement mandatory governmental sanctions, dozens of others are taking the initiative to impose their own sanctions on Russia and/or to provide aid to Ukraine.
Of course, some big-name companies with operations in Russia have been conspicuously silent. I won’t name names so I can’t be accused of calling them out before they have a little more time to take action (all right, one of them starts with “Mc” and rhymes with “cuckolds” if you really can’ t live without a hint).
It is too early to know whether taking a meaningful stance on Russia’s invasion of Ukraine, or failing to do so, will actually have long-term monetary consequences for any individual company. Yet, efforts are underway to track which companies are doing what in response to the crisis.
What is the responsibility of companies to do something about Russia’s invasion of Ukraine? That, I suppose, is for you to decide. From a risk analysis perspective though, it’s hard to imagine an easier instance of picking the right side of an issue than opposing an unprovoked and completely unjustified invasion of another country that has already needlessly caused thousands of deaths.
This could be a nice little silver lining to an otherwise dark and dangerous time. There probably has never been such a profound example of so many corporations going out of their way to do the right thing not because they had to, not because it was necessarily profitable, but just because it was the right thing.
Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless attributed to his own and should not be to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at firstname.lastname@example.org.