good afternoon everyone I’m Lydia lui and I want to spend a little time this
and I want to spend a little time this
and I want to spend a little time this afternoon talking to you about
afternoon talking to you about
afternoon talking to you about corporations that they were originally
corporations that they were originally
corporations that they were originally designed to do public good what went
designed to do public good what went
designed to do public good what went wrong
wrong
wrong and as many of us were having lunch this
and as many of us were having lunch this
and as many of us were having lunch this afternoon I was on the phone with my
afternoon I was on the phone with my
afternoon I was on the phone with my family in the Dominican Republic and in
family in the Dominican Republic and in
family in the Dominican Republic and in Miami talking about Irma and Jose that
Miami talking about Irma and Jose that
Miami talking about Irma and Jose that is also immediately behind it and I want
is also immediately behind it and I want
is also immediately behind it and I want to say that disasters do happen and when
to say that disasters do happen and when
to say that disasters do happen and when they do our reaction to them is critical
they do our reaction to them is critical
they do our reaction to them is critical my talk today begins with regard to deep
my talk today begins with regard to deep
my talk today begins with regard to deep horizon as many of you recall deep
horizon as many of you recall deep
horizon as many of you recall deep horizon caught on fire and exploded in a
horizon caught on fire and exploded in a
horizon caught on fire and exploded in a matter of minutes in 2010 in the Gulf of
matter of minutes in 2010 in the Gulf of
matter of minutes in 2010 in the Gulf of Mexico and as many of the world watched
Mexico and as many of the world watched
Mexico and as many of the world watched in horror there were those that
in horror there were those that
in horror there were those that responded immediately to help
responded immediately to help
responded immediately to help particularly the US Coast Guard private
particularly the US Coast Guard private
particularly the US Coast Guard private ships that were in the area to rescue
ships that were in the area to rescue
ships that were in the area to rescue the 125 crew members that were on board
the 125 crew members that were on board
the 125 crew members that were on board and needed to exit the rig immediately
and needed to exit the rig immediately
and needed to exit the rig immediately 125 individuals on board 17 severely
125 individuals on board 17 severely
125 individuals on board 17 severely injured with second and third degree
injured with second and third degree
injured with second and third degree burns eleven died in the explosion and
burns eleven died in the explosion and
burns eleven died in the explosion and the ones that were rescued the first
the ones that were rescued the first
the ones that were rescued the first thing that they did upon being rescued
thing that they did upon being rescued
thing that they did upon being rescued was bending down and praying for those
was bending down and praying for those
was bending down and praying for those of their colleagues that have not made
of their colleagues that have not made
of their colleagues that have not made it the human impact on all of us
it the human impact on all of us
it the human impact on all of us was staggering that this type of
was staggering that this type of
was staggering that this type of connectivity was something that we too
connectivity was something that we too
connectivity was something that we too would hope that whenever a tragedy would
would hope that whenever a tragedy would
would hope that whenever a tragedy would strike that we would be able to respond
strike that we would be able to respond
strike that we would be able to respond in kind for days and weeks later the
in kind for days and weeks later the
in kind for days and weeks later the world watched as Deepwater Horizon
world watched as Deepwater Horizon
world watched as Deepwater Horizon continued to burn it burned and 4.9
continued to burn it burned and 4.9
continued to burn it burned and 4.9 million barrels of oil spilled into the
million barrels of oil spilled into the
million barrels of oil spilled into the Gulf of Mexico and as no water tends to
Gulf of Mexico and as no water tends to
Gulf of Mexico and as no water tends to travel so as the water
travel so as the water
travel so as the water downward into the Caribbean Sea so did
downward into the Caribbean Sea so did
downward into the Caribbean Sea so did the oil and many of the Caribbean
the oil and many of the Caribbean
the oil and many of the Caribbean islands where I am from are still
islands where I am from are still
islands where I am from are still suffering from the environmental impact
suffering from the environmental impact
suffering from the environmental impact of deepwater horizon out the world watch
of deepwater horizon out the world watch
of deepwater horizon out the world watch this type of shocking human drama we
this type of shocking human drama we
this type of shocking human drama we wanted answers and bp’s management
wanted answers and bp’s management
wanted answers and bp’s management responds to questions that they were
responds to questions that they were
responds to questions that they were being asked by the media The Guardian
being asked by the media The Guardian
being asked by the media The Guardian the New York Times as to how this could
the New York Times as to how this could
the New York Times as to how this could have happened Tony Hayward who was the
have happened Tony Hayward who was the
have happened Tony Hayward who was the CEO at the time gave answers that were
CEO at the time gave answers that were
CEO at the time gave answers that were very disturbing there were things such
very disturbing there were things such
very disturbing there were things such as oh the Gulf of Mexico is such a large
as oh the Gulf of Mexico is such a large
as oh the Gulf of Mexico is such a large body of water the amount of oil that
body of water the amount of oil that
body of water the amount of oil that we’re putting in it
we’re putting in it
we’re putting in it infant testimony other comments such as
infant testimony other comments such as
infant testimony other comments such as well how did we BP get into the
well how did we BP get into the
well how did we BP get into the situation it showed a disconnect for the
situation it showed a disconnect for the
situation it showed a disconnect for the human interests and the actual
human interests and the actual
human interests and the actual individuals that were suffering because
individuals that were suffering because
individuals that were suffering because of the Deepwater Horizon explosion for
of the Deepwater Horizon explosion for
of the Deepwater Horizon explosion for many of us we wanted answers in the US
many of us we wanted answers in the US
many of us we wanted answers in the US and the US Congress responded
and the US Congress responded
and the US Congress responded immediately with an investigation did
immediately with an investigation did
immediately with an investigation did not waste any time in determining that
not waste any time in determining that
not waste any time in determining that BP was reckless in its constant delay of
BP was reckless in its constant delay of
BP was reckless in its constant delay of maintenance of the rig the US Committee
maintenance of the rig the US Committee
maintenance of the rig the US Committee on Energy and Commerce specifically
on Energy and Commerce specifically
on Energy and Commerce specifically noted that had BP management spent a
noted that had BP management spent a
noted that had BP management spent a hundred and twenty eight thousand
hundred and twenty eight thousand
hundred and twenty eight thousand dollars more and ten hours of work the
dollars more and ten hours of work the
dollars more and ten hours of work the disaster would have been avoided that
disaster would have been avoided that
disaster would have been avoided that angered a lot of people around the world
angered a lot of people around the world
angered a lot of people around the world the just position of lives to be sick
the just position of lives to be sick
the just position of lives to be sick maintenance that was avoided bothered us
maintenance that was avoided bothered us
maintenance that was avoided bothered us greatly as a result of that BP reached a
greatly as a result of that BP reached a
greatly as a result of that BP reached a settlement with the US government
settlement with the US government
settlement with the US government fifteen point seven billion was given to
fifteen point seven billion was given to
fifteen point seven billion was given to the US government in the various states
the US government in the various states
the US government in the various states that were affected Texas Louisiana
that were affected Texas Louisiana
that were affected Texas Louisiana Alabama Mississippi Florida my home
Alabama Mississippi Florida my home
Alabama Mississippi Florida my home state these are the same states that you
state these are the same states that you
state these are the same states that you might say are in the media again with
might say are in the media again with
might say are in the media again with regard to
regard to
regard to the Hurricanes Harvey Erma and now Jose
the Hurricanes Harvey Erma and now Jose
the Hurricanes Harvey Erma and now Jose that is on its way
that is on its way
that is on its way beep he continued to spend another fifty
beep he continued to spend another fifty
beep he continued to spend another fifty four billion in environmental cleanup as
four billion in environmental cleanup as
four billion in environmental cleanup as well as economic damage relief to those
well as economic damage relief to those
well as economic damage relief to those who had lost everything so we must ask
who had lost everything so we must ask
who had lost everything so we must ask ourselves why didn’t BP make the safety
ourselves why didn’t BP make the safety
ourselves why didn’t BP make the safety repairs that needed to be done to
repairs that needed to be done to
repairs that needed to be done to stabilize the Deepwater Horizon rig and
stabilize the Deepwater Horizon rig and
stabilize the Deepwater Horizon rig and the answer is simple drilling schedule
the answer is simple drilling schedule
the answer is simple drilling schedule bps concern is that if they didn’t
bps concern is that if they didn’t
bps concern is that if they didn’t maintain their drilling schedule they
maintain their drilling schedule they
maintain their drilling schedule they would be delayed in drawing the oil out
would be delayed in drawing the oil out
would be delayed in drawing the oil out of the earth in barrelling the oil and
of the earth in barrelling the oil and
of the earth in barrelling the oil and distributing it to its wide distribution
distributing it to its wide distribution
distributing it to its wide distribution network in making the sales and in
network in making the sales and in
network in making the sales and in making the profits so BP then traded
making the profits so BP then traded
making the profits so BP then traded lives of individuals for profit
lives of individuals for profit
lives of individuals for profit maximization of its shareholders we must
maximization of its shareholders we must
maximization of its shareholders we must ask ourselves how did we get here where
ask ourselves how did we get here where
ask ourselves how did we get here where there’s a trade-off to human lives to
there’s a trade-off to human lives to
there’s a trade-off to human lives to profit and in particular it bothers me
profit and in particular it bothers me
profit and in particular it bothers me greatly because that was not the
greatly because that was not the
greatly because that was not the original purpose of corporations in the
original purpose of corporations in the
original purpose of corporations in the United States corporations were
United States corporations were
United States corporations were originally designed to build hospitals
originally designed to build hospitals
originally designed to build hospitals and roads and home and highways and
and roads and home and highways and
and roads and home and highways and schools and ports it was for the public
schools and ports it was for the public
schools and ports it was for the public good and the immediate community in
good and the immediate community in
good and the immediate community in which that corporation operated it
which that corporation operated it
which that corporation operated it wasn’t to destroy lives or to simply
wasn’t to destroy lives or to simply
wasn’t to destroy lives or to simply make a dollar so when did it change in
make a dollar so when did it change in
make a dollar so when did it change in the US well the change primarily with
the US well the change primarily with
the US well the change primarily with one man and one Court decision Henry
one man and one Court decision Henry
one man and one Court decision Henry Ford Ford Motor Company he was the
Ford Ford Motor Company he was the
Ford Ford Motor Company he was the majority shareholder and at the time in
majority shareholder and at the time in
majority shareholder and at the time in 1917 he wanted to implement an employee
1917 he wanted to implement an employee
1917 he wanted to implement an employee benefits program because he had an
benefits program because he had an
benefits program because he had an excess imagine this in excess of ten
excess imagine this in excess of ten
excess imagine this in excess of ten million dollars of profit in 1917 that
million dollars of profit in 1917 that
million dollars of profit in 1917 that is incredible and what he wanted to do
is incredible and what he wanted to do
is incredible and what he wanted to do with the money was give it back to the
with the money was give it back to the
with the money was give it back to the employees by giving them food housing
employees by giving them food housing
employees by giving them food housing healthcare education make
healthcare education make
healthcare education make are cheaper for his employees to
are cheaper for his employees to
are cheaper for his employees to purchase and why would he do that you’re
purchase and why would he do that you’re
purchase and why would he do that you’re wondering while it was right after World
wondering while it was right after World
wondering while it was right after World War one and the US was in yet another
War one and the US was in yet another
War one and the US was in yet another recession and some might even say light
recession and some might even say light
recession and some might even say light depression there was very little food to
depression there was very little food to
depression there was very little food to eat in the US was very little housing
eat in the US was very little housing
eat in the US was very little housing and as the Chattanooga Times quoted
and as the Chattanooga Times quoted
and as the Chattanooga Times quoted people were dying in the streets in the
people were dying in the streets in the
people were dying in the streets in the United States and mr. Ford felt that his
United States and mr. Ford felt that his
United States and mr. Ford felt that his money could be spent in bettering the
money could be spent in bettering the
money could be spent in bettering the lives of his employees there was one
lives of his employees there was one
lives of his employees there was one little problem the Dodge Brothers the
little problem the Dodge Brothers the
little problem the Dodge Brothers the Dodge Brothers were minority
Dodge Brothers were minority
Dodge Brothers were minority shareholders at the dodge at the Ford
shareholders at the dodge at the Ford
shareholders at the dodge at the Ford Motor Company at the time and they
Motor Company at the time and they
Motor Company at the time and they wanted that 10 million dollars of excess
wanted that 10 million dollars of excess
wanted that 10 million dollars of excess profits distributed to them because they
profits distributed to them because they
profits distributed to them because they had a little business to that they were
had a little business to that they were
had a little business to that they were developing and they needed the money to
developing and they needed the money to
developing and they needed the money to grow their business so here was a fight
grow their business so here was a fight
grow their business so here was a fight between strong spirited men off to court
between strong spirited men off to court
between strong spirited men off to court they went the Dodge Brothers sued Ford
they went the Dodge Brothers sued Ford
they went the Dodge Brothers sued Ford Motor Company and a Michigan Court
Motor Company and a Michigan Court
Motor Company and a Michigan Court decided when they read the corporate
decided when they read the corporate
decided when they read the corporate charter of the Ford Motor Company which
charter of the Ford Motor Company which
charter of the Ford Motor Company which indicates what is the legal purpose of
indicates what is the legal purpose of
indicates what is the legal purpose of your business the judge realized all
your business the judge realized all
your business the judge realized all handwritten into the line of what is
handwritten into the line of what is
handwritten into the line of what is your legal purpose Henry Ford’s attorney
your legal purpose Henry Ford’s attorney
your legal purpose Henry Ford’s attorney had written to make money and the court
had written to make money and the court
had written to make money and the court said well if that is your purpose then
said well if that is your purpose then
said well if that is your purpose then Ford Motor Company is not a charity you
Ford Motor Company is not a charity you
Ford Motor Company is not a charity you cannot develop this type of employee
cannot develop this type of employee
cannot develop this type of employee program the excess profits must be
program the excess profits must be
program the excess profits must be distributed to the shareholders but the
distributed to the shareholders but the
distributed to the shareholders but the court was speaking as to the Ford Motor
court was speaking as to the Ford Motor
court was speaking as to the Ford Motor Company only it wasn’t speaking about
Company only it wasn’t speaking about
Company only it wasn’t speaking about all corporations for all time to come
all corporations for all time to come
all corporations for all time to come and it was focused on the purpose that
and it was focused on the purpose that
and it was focused on the purpose that Henry Ford’s attorney had indicated in
Henry Ford’s attorney had indicated in
Henry Ford’s attorney had indicated in the corporate charter every since then
the corporate charter every since then
the corporate charter every since then we have had this culture not just within
we have had this culture not just within
we have had this culture not just within the United States but it’s a global
the United States but it’s a global
the United States but it’s a global culture within business that the focus
culture within business that the focus
culture within business that the focus is to maximize profits for shareholders
is to maximize profits for shareholders
is to maximize profits for shareholders and at times that the expense of the
and at times that the expense of the
and at times that the expense of the environment and at the expense of human
environment and at the expense of human
environment and at the expense of human lives so why has this misconception can
lives so why has this misconception can
lives so why has this misconception can continued I cannot be the only person
continued I cannot be the only person
continued I cannot be the only person who has read this surely there are
who has read this surely there are
who has read this surely there are others that must say wait a minute
others that must say wait a minute
others that must say wait a minute we’ve misunderstood all this time well
we’ve misunderstood all this time well
we’ve misunderstood all this time well here’s what happens you will hear a lot
here’s what happens you will hear a lot
here’s what happens you will hear a lot of Business School students business
of Business School students business
of Business School students business scholars business leaders CNBC experts
scholars business leaders CNBC experts
scholars business leaders CNBC experts tell you that management has a
tell you that management has a
tell you that management has a responsibility to maximize profits for
responsibility to maximize profits for
responsibility to maximize profits for shareholders and they are wrong
shareholders and they are wrong
shareholders and they are wrong the truth is they are confusing the
the truth is they are confusing the
the truth is they are confusing the concept of what we call if I do sherry
concept of what we call if I do sherry
concept of what we call if I do sherry Duty which are two things one do what is
Duty which are two things one do what is
Duty which are two things one do what is in the best interest of the corporation
in the best interest of the corporation
in the best interest of the corporation and to be loyal to the corporation it
and to be loyal to the corporation it
and to be loyal to the corporation it does not include making money for
does not include making money for
does not include making money for shareholders by any means necessary that
shareholders by any means necessary that
shareholders by any means necessary that is a custom that has developed further
is a custom that has developed further
is a custom that has developed further to that there’s no US law that requires
to that there’s no US law that requires
to that there’s no US law that requires a corporation to maximize profits for
a corporation to maximize profits for
a corporation to maximize profits for shareholders it is only a custom that we
shareholders it is only a custom that we
shareholders it is only a custom that we have become accustomed to this concept
have become accustomed to this concept
have become accustomed to this concept was further entrenched by Milton
was further entrenched by Milton
was further entrenched by Milton Friedman’s article in The New York Times
Friedman’s article in The New York Times
Friedman’s article in The New York Times in 1970 where Milton Friedman is often
in 1970 where Milton Friedman is often
in 1970 where Milton Friedman is often quoted as saying the sole responsibility
quoted as saying the sole responsibility
quoted as saying the sole responsibility of corporations is to utilize all of his
of corporations is to utilize all of his
of corporations is to utilize all of his resources and activities to maximize the
resources and activities to maximize the
resources and activities to maximize the profits of shareholders that is not what
profits of shareholders that is not what
profits of shareholders that is not what Milton Friedman said and nor was it what
Milton Friedman said and nor was it what
Milton Friedman said and nor was it what he personally believed the remainder of
he personally believed the remainder of
he personally believed the remainder of the sentence of his statement was never
the sentence of his statement was never
the sentence of his statement was never included in anything that you really
included in anything that you really
included in anything that you really read about mr. Friedman he said so long
read about mr. Friedman he said so long
read about mr. Friedman he said so long as the corporations remain within the
as the corporations remain within the
as the corporations remain within the rule of the game and that is to say that
rule of the game and that is to say that
rule of the game and that is to say that they engage in free competition they do
they engage in free competition they do
they engage in free competition they do not commit deception nor fraud that is
not commit deception nor fraud that is
not commit deception nor fraud that is what he said but for the past 50 or so
what he said but for the past 50 or so
what he said but for the past 50 or so years the American culture and global
years the American culture and global
years the American culture and global business culture has disregarded that
business culture has disregarded that
business culture has disregarded that and focused rather on maximizing profits
and focused rather on maximizing profits
and focused rather on maximizing profits for shareholders but there’s good news
for shareholders but there’s good news
for shareholders but there’s good news since 1995
since 1995
since 1995 particular since 2014 you see a huge
particular since 2014 you see a huge
particular since 2014 you see a huge jump almost 200 percent jump with the
jump almost 200 percent jump with the
jump almost 200 percent jump with the billions of dollars that are going into
billions of dollars that are going into
billions of dollars that are going into the investments of socially conscious
the investments of socially conscious
the investments of socially conscious investment strategies and whether that
investment strategies and whether that
investment strategies and whether that be for social change in rural
be for social change in rural
be for social change in rural communities whether that be for economic
communities whether that be for economic
communities whether that be for economic development within urban centers whether
development within urban centers whether
development within urban centers whether that be return to work for single moms
that be return to work for single moms
that be return to work for single moms or those that are disabled there is a
or those that are disabled there is a
or those that are disabled there is a consciousness within the US and other
consciousness within the US and other
consciousness within the US and other countries as well that we can do better
countries as well that we can do better
countries as well that we can do better there is an alternative construct by
there is an alternative construct by
there is an alternative construct by which we can conduct business and not do
which we can conduct business and not do
which we can conduct business and not do damage not to damage to the environment
damage not to damage to the environment
damage not to damage to the environment not do damage to individuals and that
not do damage to individuals and that
not do damage to individuals and that construct is the public benefits
construct is the public benefits
construct is the public benefits corporation and within the Mandate of
corporation and within the Mandate of
corporation and within the Mandate of the public benefits corporation what you
the public benefits corporation what you
the public benefits corporation what you find is that there is a requirement for
find is that there is a requirement for
find is that there is a requirement for the board and management to agree from
the board and management to agree from
the board and management to agree from the onset that while in the process of
the onset that while in the process of
the onset that while in the process of seeking profit they must must it is not
seeking profit they must must it is not
seeking profit they must must it is not optional must weigh the impact of their
optional must weigh the impact of their
optional must weigh the impact of their business decisions as to how it will
business decisions as to how it will
business decisions as to how it will affect employees how will it affect the
affect employees how will it affect the
affect employees how will it affect the environment how will it affect the
environment how will it affect the
environment how will it affect the society within which they operate and
society within which they operate and
society within which they operate and how will it affect for generations to
how will it affect for generations to
how will it affect for generations to come
come
come there is a conscious collective thought
there is a conscious collective thought
there is a conscious collective thought process that we should not do harm with
process that we should not do harm with
process that we should not do harm with the business decisions that we do today
the business decisions that we do today
the business decisions that we do today and what we find is that this concept is
and what we find is that this concept is
and what we find is that this concept is taking root it is taking root not only
taking root it is taking root not only
taking root it is taking root not only in the United States and you see 33
in the United States and you see 33
in the United States and you see 33 states have already agreed to legalize
states have already agreed to legalize
states have already agreed to legalize and support this concept of the public
and support this concept of the public
and support this concept of the public benefits corporation and these are not
benefits corporation and these are not
benefits corporation and these are not little States these are big states this
little States these are big states this
little States these are big states this is the state of Maryland the state of
is the state of Maryland the state of
is the state of Maryland the state of Pennsylvania the state of New York the
Pennsylvania the state of New York the
Pennsylvania the state of New York the state of Delaware which has the which is
state of Delaware which has the which is
state of Delaware which has the which is the largest venue of the multinational
the largest venue of the multinational
the largest venue of the multinational corporations in the world have said we
corporations in the world have said we
corporations in the world have said we the Chancery Court of Delaware agree
the Chancery Court of Delaware agree
the Chancery Court of Delaware agree that there should be a different
that there should be a different
that there should be a different mechanism
mechanism
mechanism by which corporations are seeking
by which corporations are seeking
by which corporations are seeking profits and you might say well are these
profits and you might say well are these
profits and you might say well are these corporations that are considering the
corporations that are considering the
corporations that are considering the welfare of others above making profits
welfare of others above making profits
welfare of others above making profits their names that we recognize Ben and
their names that we recognize Ben and
their names that we recognize Ben and Jerry’s a little ice cream anyone Cabot
Jerry’s a little ice cream anyone Cabot
Jerry’s a little ice cream anyone Cabot a little cheese anyone let’s see which
a little cheese anyone let’s see which
a little cheese anyone let’s see which is a European equivalent to eBay where
is a European equivalent to eBay where
is a European equivalent to eBay where we’re all sort of trading stuff that we
we’re all sort of trading stuff that we
we’re all sort of trading stuff that we don’t want anymore so these are large
don’t want anymore so these are large
don’t want anymore so these are large companies well-known companies powerful
companies well-known companies powerful
companies well-known companies powerful companies that are saying we can do
companies that are saying we can do
companies that are saying we can do something different we can do it in a
something different we can do it in a
something different we can do it in a different way that isn’t causing harm
different way that isn’t causing harm
different way that isn’t causing harm while we are still making money and this
while we are still making money and this
while we are still making money and this is not just happening the US that’s
is not just happening the US that’s
is not just happening the US that’s happening in the UK in Canada in
happening in the UK in Canada in
happening in the UK in Canada in Australia Italy last year said the
Australia Italy last year said the
Australia Italy last year said the entire country can easily reincorporate
entire country can easily reincorporate
entire country can easily reincorporate itself into a public benefits
itself into a public benefits
itself into a public benefits corporation to make a statement that we
corporation to make a statement that we
corporation to make a statement that we as a people can do better while seeking
as a people can do better while seeking
as a people can do better while seeking the dollar so for me this is simply a
the dollar so for me this is simply a
the dollar so for me this is simply a reconstruction of what the US
reconstruction of what the US
reconstruction of what the US corporations were originally intended to
corporations were originally intended to
corporations were originally intended to do provide a public good to the society
do provide a public good to the society
do provide a public good to the society within which they operate it is good to
within which they operate it is good to
within which they operate it is good to see that almost 200 years later we’re
see that almost 200 years later we’re
see that almost 200 years later we’re fulfilling that goal
fulfilling that goal
fulfilling that goal thank you
thank you
thank you [Applause]
”
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