Calls for corporate democracy are misguided

“Undemocratic” is often considered synonymous with “bad.” But this generalization is only valid for governments, not for private organizations.

Consider private corporations, whose executives wield great power. As Reinhold Niebuhr (1892-1971) reminded us, all power is morally ambiguous. The question naturally arises: How can abuses by top corporation leaders be controlled?

Corporate leaders wield limited power. Contract, corporate and labor law hem them in. Executives violating their employment contract, the corporate charter or their duties to shareholders can be taken to court and can be fired. And corporations that commit torts or crimes are legally accountable.

Some critics, however, have contended that what is really needed is to democratize each organization so its leaders are responsive to the desires of the majority of its members. Popular slogans back in the 1960s and 1970s, the heyday of this idea, included: “corporate democracy,” “democratize the university,” “industrial democracy.”