LD: Corporate Responsibility
Corporations ought to value their responsibility to shareholders over the public interest when the two conflict.
By: Scott Pettit
Beehive Forensics Institute
7/16/2015
Corporations ought to value their responsibility to shareholders over the public interest when the two conflict.
Topic Overview
Aff Case
1 AC
Contention 1:
Contention 2:
Neg Case
1 NC
Contention 1
Contention 2
Contention 3
Aff Cards
Neg Cards
Additional Resources
Topic Overview
Before we can address this resolution, we must answer some important questions. Who is considered to be a shareholder? What is the public interest? In which type of scenarios would one group benefit over another?
What is a shareholder?
Investopedia.com defines a shareholder as “Any person, company or other institution that owns at least one share of a company’s stock. Shareholders are a company's owners. They have the potential to profit if the company does well, but that comes with the potential to lose if the company does poorly. A shareholder may also be referred to as a "stockholder".” This indicates that shareholders are not the individuals in charge of running the company on a day-to-day basis. These are people or groups that have invested money in hopes that a company does well and their investment grows in value.
Shareholders are more than just people. In the majority of developed nations, the general public has much of their retirement savings, either through mutual funds, IRAs, or pension plans, invested in corporations through the public market. This makes this resolution a little more difficult to debate. With this understanding, one could easily argue that the public interest needs to focus on the success of corporations for the benefit of its shareholders. Many times in recent history, recessions have hurt the general public due to major loses for shareholders.
What is the public interest?
How you answer this question is going to have a great impact on this debate. There are many variances of the phrase “public interest” between law applications, business applications and government applications. A basic definition found through the online businessdictionary.com states that the public interest is the, “Welfare of the general public (in contrast to the selfish interest of a person, group, or firm) in which the whole society has a stake and which warrants recognition, promotion, and protection by the government and its agencies.” In most cases, “government and its agencies” could be replaces with “corporations”.
The public interest is based on subjectivity. Therefore, what is acceptable in one instance may not be acceptable in another. The affirmative side is going to want to address the definitions in a more utilitarian way. Morality and what is best for the community is also going to be important for the affirmative. Environmental polices do play a part in the public interest if it is defined as such.
The negation is going to want to focus on the confusion that is created by trying to define the public interest. Universal rights and application of ideas may be great for some but not for everyone. For example, liaise faire capitalism might not be in the public interest in all societies.
“When the two conflict”
The resolution asks us to only look at instances when one group is going to benefit and the other is not. It does not promote the idea that corporations must always value their shareholders and vice versa. This begs the question, what is going to be an instance when the two sides will conflict? Environmental policies, harmful product sales (tobacco and pornography), and anti-monopoly legislation are all examples of when one group might benefit over another.
Affirmative Strategies
One strategy is to challenge the idea of the “public interest” as must as possible. If the idea of the public interest can’t be defined, than it would be unfair to expect corporations to comply with what is best for the public. You could link your argument to the idea that shareholders are the public and therefore what is best for the shareholders is going to be best for the public interest.
Another strategy is to use the affirmative side to defend the idea of capitalism. Corporations must be able to make decisions that would allow them to grow and prosper. In return, the economy would grow and society would benefit. Economist argue that restrictions on corporations have led to down-turns in the economy.
A third strategy is to look at the question of who is responsible to promote the public interest. Corporations should be allowed to due what ever is necessary to succeed as long as it is within legal practices. Therefore, governments have the responsibility to ensure that the public’s interest is protected. Functioning democracy therefore will naturally lead to laws which the public feels are necessary to protect their interests. A clear and consistent rule book would be welcomed by corporations while ensuring the public interest is controlled. A word of warning, this does theoretically overlook the “when the two conflict” part of the resolution and nay lead to a theory-based debate.
Negation Strategies
The negation must show that what is good for the public interest outweighs the desires of corporations. By their nature, corporations rely on their shareholders investments, and would not exist if not for the shareholder model. Therefore, “when the two conflict” the negation has the burden to show that the public interest must be protected and valued more that the status quo model.
One strategy would be to address the potential harms of corporations cause by perusing various objectives. These harms can be specific or general. Environmental harms would be an example of general harms that damage what is best for the public. Specific harms would focus mostly on the “sin” industries. Sin industries are sectors of the economy that market products deemed to be harmful to the general public, such as tobacco and alcohol.
An additional strategy is to accept that shareholders are part of the public interest but to differentiate the differences between common shareholders and preferred shareholders. Most of the public would be common shareholders. These are people who have invested in corporations for the purpose of financial gain but do not have access to change corporate policies or manage the leadership of corporations.
The negation might also want to look at various ideas of utopia, peace, and others. Striving for ideals could benefit society as a whole while requiring the limitation of corporate power. Although you could argue for the idea of Marxism, beware of how you address this topic. Some judges would be accepting while others reject the idea in its entirety.
Aff Case
1 AC
Value:
In this debate we must value reality over conceptions. I will show that the affirmative side of this resolution is obtainable while the negation is not obtainable.
Criterion:
In order for something to be weighed, it must exist. It must be consistent and measurable. Therefore, I the affirmative can show that the idea of the public interest is not definable, than the affirmative side must win this debate.
Contention 1:
The standard of “public interest” can never be measured making it impossible for corporations to comply with the public interest.
The resolution, by including the words “when the two conflict” asks us to evaluate the correct course of action only when corporations’ actionswill benefit the shareholders but not the public interests and vice versa. Essentially, the resolution implies that public interest is measurable and consistent. This is not realistic. It is the affirmative’s position that public interest is an inconsistent idea that would benefit one group’s public interest while violating another’s.
Sub-point A: The idea of a “public interest” too abstract to be realistic
BromellHodgkinson, 2012 – 1 (Tony [Accountant], Robert [Executive Director, ICAEW], Acting in the public interest: a framework for analysis, Institute of chartered accountants in England and Wales, Report published 2012)
The public interest is an abstract notion. Asserting that an action is in the public interest involves setting oneself up in judgment as to whether the action or requirement to change behavior will benefit the public overall – a far greater set of people than can be interacted with directly. It involves interference in people’s ability to go about their business or sometimes, as a positive policy decision, non-interference in the face of alternative actions. Other terms can be used, largely interchangeably. Examples include public benefit, the public good, and the common good – the latter in the sense of the public having a common purpose, rather than goods to which there is common access. While we use the public interest throughout, the same issues apply to use of these other terms. Invoking the public interest requires justification of an ability and right to decide what is for the greater good, in the face of a natural suspicion that those proposing an action in the public interest are actually acting in their own interests.
The public interest is an abstract notion; to argue and be able to hold out that an action (or inaction) is in the public interest can require consideration of a number of complex factors and impose a burden of proof. Flaws in the argument or the outcome can rebound upon the reputation of those asserting that they are acting in the public interest, which will harm acceptance of future matters said to be in the public interest. Alternative means of justification may be preferable, where much of the public is scoped out, or can opt out.
This idea of the public interest is important to the debate. The negation must show that the public interest is measureable and therefore obtainable. Furthermore, the negation must prove why the public interest outweighs a corporation’s responsibility to its owners and shareholders.
Sub-point B: The idea of a “public interest” benefits only one groups way of thinking and not the public as a whole
BromellHodgkinson, 2012 – 2 (Tony [Accountant], Robert [Executive Director, ICAEW], Acting in the public interest: a framework for analysis, Institute of chartered accountants in England and Wales, Report published 2012)
The whole of the public must be eligible for consideration in respect of a matter, which is asserted to be of public interest, by its very nature. However, as a practical point, there will be large numbers of people whose welfare will not actually be affected by the action. The relevant public will therefore only be a sub-set of the whole public: those ‘affected’. This will include those whose welfare will be advantaged or disadvantaged, although this is not always clear-cut; also, others with a legitimate interest, for example NGOs, representative bodies and others with a mandate to speak on behalf of people who are affected. Within the relevant public there will also be degrees of impact, which may be relevant in determining how to weight views. The relevant public will not include those whose interest merely lies in finding something interesting. That is a different meaning of interest altogether.
Having determined who comprises the relevant public, the proponent of the public interest action’s first consideration in determining what is in their interest should be what their wants are and whether the action is consistent with those. In some circumstances fundamental values may be the starting point but popular opinion must be relevant. However, determination of opinion is not easy. First, by its nature, the relevant public in a public interest matter will be broadly based. Second, what people want is complicated: it usually revolves around happiness, which is a subjective notion built around a whole series of factors that often conflict with each other, those of other people and those of other cultures. Wants therefore tend to conflict. Third, interests can coincide with those of others and interest groups will be created. Inevitably some will have a public interest perspective and some not. Some are more articulate or otherwise better at making themselves heard than others and expressed opinion will not necessarily be the same as actual opinion.
The negation in this debate must show that public interest is truly the interest of the public as a whole. If any “public interest” overlooks a minority, in anyway, one cannot make the claim that it is in the interest of the public as a whole.
In the words of John Stewart Mill, “If all mankind minus one, were of one opinion, and only on person were of the contrary opinion, mankind would be no more justified in silencing that one person, than he…would be justified in silencing mankind.”
Sub-point C: The idea of “public interest” cannot be a decision of a small group
History shows us that groups often hide behind the idea of “public interest” to benefit themselves at the expense of others. Recently, it has been argued that is in the “public interest” to prevent same-sex couples from getting married. In the past, the idea of the “public interest” has been used to promote racism, encourage monopolies, and limit worker’s rights.
A specific example of a group using the “public interest” to their own advantage is the media industry. The media claims to publish stories based on what the public needs to know. This has led to even the most respected news agencies to be caught up in marketing ploys designed to make money while they claim to promote the public interest.
O’neill, 2010 (Brendan [Editor, blogger, writer], The tyranny of ‘the public interest’, Spiked, Published 12/2/2010, accessed online 7/16/15,
In a video posted on the Guardian website, the newspaper’s editor, Alan Rusbridger, says that he and a team of senior journalists – those with ‘great knowledge’ – filtered the diplomatic documents leaked by Wikileaks to work out which of them was ‘in the public interest’. Which got me thinking: who decides what is in the public interest? Rusbridger and five or six of his staff? How do they know? Do they ask the public? Is there a secret document somewhere – as yet unleaked– which informs these possessors of ‘great knowledge’ exactly what is and is not in the public interest?
It is striking that for the past two years, the very same Guardian – as well as the New York Times, which also published the Wikileaks documents – has been slating the News of the World for employing phone hackers to eavesdrop on celebs’ private phone conversations.Because now, these two heavyweight broadsheets are likewise publishing material that was obtained in a technically illegal fashion and which also reveals private shenanigans – from American diplomats’ description of Kim Jong-il as ‘flabby’ to the revelation that President Nicolas Sarkozy of France once chased a rabbit around his office.
The Guardian’s defense of its own publication of illegally obtained private discussions between well-known people in contrast to the News of the World’s is interesting. Its media correspondent states: ‘The whole point about the News of the World’s phone hacking is that the stories it obtained could not be said to have been in the public interest, [whereas] we can demonstrate that we are acting in the public interest.’ So it is not in the public interest to reveal what Prince Harry said in private to his girlfriend Chelsy, but it is in the public interest to reveal what Prince Andrew said in private to an American diplomat. It isn’t in the public interest to publish stories about what one celeb thinks of another (‘fat, stupid, UGLY’), but it is in the public interest to tell us that American diplomats think Colonel Gaddafi uses botox and wants to screw his Ukrainian nurse and that Kim Jong-il has a weight problem.
It’s hard to avoid the conclusion that ‘the public interest’, as defined in these discussions, has very little to do with the living, breathing public. The higher valuation given to the highbrow tittle-tattle spouted by the Wikileaks brigade in contrast to the lowbrow tittle-tattle spouted by the News of the World is really a question of taste, of preference, even of snobbery (‘our gossip is worthier than yours!’), yet it gets dressed up in the pseudo-democratic lingo of the public interest. What these journalists and editors really mean when they talk about ‘what is in the public interest’ is what they think is good for the public – what they have decreed, in their closed-off meetings using some narrow legalistic definitions, to be edifying and respectable enough for publication.
Contention 2:
If the public interest cannot be defined, than corporations are obligated to cater to their shareholders
Miwa, 1999 (Yoshiro [Professor of economics, University of Tokyo], Corporate social responsibility: dangerous and harmful, though maybe not irrelevant, Cornell Law Review, Vol. 84, Number 5, pp. 1227-1254)
The view has been gaining widespread acceptance that corporate officials and labor leaders have a "social responsibility" that goes beyond serving the interest of their stockholders or their members. This view shows a fundamental misconception of the character and nature of a free economy. In such an economy, there is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud.... It is the responsibility of the rest of us to establish a framework of law such that an individual in pursuing his own interest is, to quote Adam Smith, again, "led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good."'