Tuesday, June 17, 2014

I Am So Happy…But Is There Room for Happiness in Corporate Law?

So, I’ve been thinking a lot about “happiness” lately. Not just because of Pharrell’s catchy tune, but more so because I am at the beginning of a project where I am questioning whether there is room for happiness and well-being in corporate law (both in theory and in practice).

First, what do I mean by happiness? To be honest, I am not quite sure yet and that may be part of my search and exploration.  Happiness can be thought of in terms of “raw subjective feeling”, where a happy life is one that “maximizes feelings of pleasure and minimizes pain” (the Hedonism Theory). It can also be thought of in terms of fulfilling whatever it is you desire (the Desire Theory) and yet still, happiness could also be viewed as consisting of achieving “things” (for lack of a better word) that are “objectively valuable” - for example, having financial security, love, a better education, and good health (the Objective List Theory). Additionally, happiness could be thought of as encompassing all three of these theories. For example the Authentic Happiness Theory developed by Martin E.P. Seligman and Ed Royzman, views happiness as consisting of “three distinct kinds of happiness: the Pleasant Life (pleasures), the Good Life (engagement) and the Meaningful Life.” Seligman and Royzman's framework for thinking about happiness in the wider sense is one of several that I have found useful for thinking about happiness in the specific context of corporate law, as it consists of both subjective measurements (Pleasant Life and Good Life), as well as objective measurements (the Meaningful Life, which according to Seligman and Royzman focuses on “what is larger and more worthwhile than just the self’s pleasures and desires”).

Well, what about the Meaningful Life in the context of the corporation? Is such a concept even relevant? My preliminary answer is yes – for among other things, as I have written about previously...

  • as corporations endeavor to deal with increasing demands for sustainable business models from their consumers and various other stakeholders
  • as concepts of shifting from our current linear economy to a circular economy gain more traction
  • as corporations begin to increasingly focus on meeting the estimated $5 trillion demand at the BoP,  and
  • as tri-sector cooperation models that leverage the strengths of for-profit business, governments, and NGOs in tackling global problems, such as access to clean water and childhood malnutrition increase...

in order to remain competitive, corporations will have to contend with developing business models that contribute to some larger societal good beyond mere profit maximization.

Of course the cynic in me can’t help but ask whether such new business models will represent a shift to greater other-regarding behavior from corporations or whether they are really no more than profit maximand norms dressed in Aristotelian garb.

In terms of corporate law, does our current corporate law framework and its attendant core concepts such as efficiency, transparency, accountability, “shareholders qua owners” allow for considerations of an "other-regarding" Meaningful Life? I think the BJR and current corporate law framework would say “yes”, barring some extreme circumstance a la Revlon, but I also think it depends in large part on who we appoint as our proxy for measuring meaning.


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