The new ethics laws in the United States could mean big changes in how Americans are treated by corporations, their families and communities, according to experts.
The new US ethics rules will be introduced in March and will set out rules that can be applied to private businesses and to the public sector.
The changes will also see the legalisation of corporate social responsibility (CSR) for corporate entities and the legalising of “good governance”, which is a system of accountability and transparency that is usually found in democratic nations such as Australia.
“The US is now a place where the notion of ‘good governance’ has taken hold,” said Professor Jonathan Alcorn from the University of Melbourne, who is a co-author of a new book on the ethics of corporate behaviour.
“This means that for the first time the US will be a place in which a corporate entity can be held to account for its behaviour.
That’s an exciting change.”‘
A great start’For the first half of the 20th century, America’s most powerful corporations faced a dilemma: they were both the dominant and most successful industries in the country.
But then a series of economic and political shocks took the lid off the American economy in the early 20th Century.
The country’s first female president, Frances Perkins, was also a member of the House of Representatives from Philadelphia, which had been one of the country’s largest industrial cities.
The boom and bust cycle of the American industry was reversed.
It started to reverse, and then to recover.
“As a result of that, America was the first country in the world where capitalism was on the rise, but not just in the sense of growing, but in the terms of how it was growing,” said Alcorn.
“It’s been a great start, and a lot of people are really proud of it.”
For the last two decades, the US has seen a steady increase in its corporations’ share of the economy, and that has been particularly notable in industries such as healthcare and energy.
However, Alcorn said the US also faced its own challenges.
“We were one of only two countries in the developed world where we had no income tax.
And when the US went into recession, it was very hard for many people to get back on their feet.”
So the US economy is still relatively healthy, but the US is facing some challenges, particularly with regard to healthcare and the environment, he said.
The US also has some of the strictest anti-trust laws in world history, and there are also significant legal challenges to the way corporations are run.
Alcorn said one of those challenges is that the rules around corporate social behaviour have been changed and that many people do not believe that corporations should be held accountable for their actions.
“People in the corporate world have always seen themselves as the villains, but a lot more people do now see themselves as victims, and they are increasingly turning to social media to express their outrage,” he said.
“We have seen a lot about the potential for corporate accountability in recent years.
The result is that there are a lot fewer CEOs and corporate board members in the USA than in other developed countries, which is quite a shift.”
Professor Jonathan Alcott, from the Universität München, who co-authored a book on corporate social behaviours, says the US faces its own challenge in the coming years.
“In a lot, but by no means all, of the developed economies, it’s not just a problem with the corporations themselves but the regulators,” he explained.
“So a lot is still missing, and the way we can get there will be through a mixture of social media, direct action, and other forms of protest.”
Professor Alcorn believes the US may be in for a change in the way corporate social obligations are treated in the next two years.