Looking forwards or looking back? On the temporal orientation of law and corporate responsibility
New modes of existing in the world take time to develop. This is clear throughout the history of the law. It is also a mode of thinking about responsibility and sustainability that is making its way into company and securities law. It is increasingly the case, for example, that directors and investors are expected to have regard for the ‘long term’ when pursuing their actions and interventions. In the UK, section 172 of Companies Act 2006 (CA 2006), the Corporate Governance Code (now 2018), and the Stewardship Code (2012) are examples of instruments that mark out longer temporal horizons and counsel patience.
The move to highlight the longer temporal horizons engaged by companies and investors is closely linked to the agendas of Corporate Social Responsibility (CSR). When looking to the long-term, company directors and investors encounter a wider range of options for acting in the present, and better appreciate the impact of their actions on stakeholders, communities, and the earth itself. Time gives corporate decision-makers more insight, reason, and pause about matters to do with sustainability, and the opportunity to counter the kinds of cognitive errors and injustices that have been shown to beget short-term horizons.
Temporal confusion and contradiction, however, also lie within this presentation of companies as simultaneously adaptive (e.g. close to the problems and quick to respond) and long-termist (e.g. able to step back and be patient about the future). This confusion affects the way that corporate figures interact with and care for the future, and it detracts from what time has to give the company that could help it to fulfill public expectations of responsibility and environmentalism in an era of surging complexity and disruption.
First, how directors relate short and long-term considerations is enacted through a sort of ‘zooming’ imagination to company law, which requires that the demands of the long-term are also justifiable to investors in the short term, and aligned with the temporal enigma that is the company’s ‘success’. This relation is stated, for example, in R (People & Planet) v HM Treasury (Queen’s Bench Division, Administrative Court 2009). The court confirms matching legal obligations in CA 2006 for directors and investors not to ‘skew’ the performance of companies ‘in an anti-competitive way.’ Only if a company’s CSR policies are ‘worse’ than at their competitors such that they might have a negative effect on the value of the company and its shares would directors be justified in acting to improve social and environmental accommodations (climate change in the case); and, then, only to protect the value of company shares (at 12).
The risk of this correlation, to long-termism, is of too much deference to investors’ sense of time and priority. Protectionist narratives about the environment must cultivate, still, their service to shareholders (and what they have ‘time for’). These acts of ‘servicing’ presently reduce the space for directors to do ‘justice’ to the demands of the future and environment (there is an extensive literature detailing investors’ impatience). They also make it really hard to determine whether corporate care and attention are really developing in a progressive way; first, because the instrumentalism is constant and second, because the actual extent of (corporate) disregard for environment often only becomes fully apparent at a later date or time (e.g. after the accumulation of multiple impacts over space and time).
This leads to a second issue, which concerns company law’s wider temporal orientation. The social and environmental problems that show up over long-range horizons tend to be things that corporate organisations already have a complex relationship with from the past. Corporate organisations might have already externalised threatened existences en masse, for example; or they might not have ‘accounted’ for their kind (workers, communities, animals, plants, minerals, and the atmosphere, etc.) in earlier transactions and stages of economic development (industrial, colonial, financialisation, etc.). Yet the usual discourse around CSR and sustainability tends to depress meaning and normativity in relation to these crucial histories and past exchanges. Companies are treated as if they were mainly (or only) animated by the capacity for (forward-looking) ‘innovation’ and ‘responsiveness,’ and not by how their governance systems and efficiency filters might have built and impacted on the world over time.
This observation raises important questions to do with the accumulation of environmental concerns that presently lie before policy makers. If we, as scholars interested in environmental justice, were better able to present the frontline issues as something to do with the legacies of corporate actors, or the way that affects fall behind efficiency filters, might this lead to more transformative reform of the company (to counter injustice, protect unraveling environments)? Are commercial and post-industrial societies facing mainly knowledge problems about the future and how to build a more sustainable version of it, or are they facing problems to do with the accumulative impact of a particular way of acting and thinking in the world, which lives by always presenting itself as without a past (e.g. as only forward-looking)?
These questions, about legacies and looking back, too often sit unacknowledged behind public policy efforts to strike the path towards sustainability. But the answers to them really matter. Together they highlight the real knowledge gaps and learning problems, which would seem to be embodied within the growing reliance of public policy makers on powerful economic filters to work through complex problems including ecosystem disruption. They also catalyse existing debates about long and short term, slow and fast attention spans, to attend multiple horizons of action and responsibility, legacies cast aside, and the structural imbalances between past, present, and future that make up things like equity’s stride.
Expanding times’ multiplicities like this is essential because it promotes thought about whether the current focus in public policy and CSR scholarship on companies’ capacity for (worldly) ‘integration’ and ‘responsibility’ might itself be presentist and limiting (allowing harms to recycle and accumulate anew behind forward-looking interventions and diplomacies). Looking back and attending to the legacies of socially significant organisations that discharge efficiency filters might be as, if not more, integral to the care, justice, and environmental conversion that is sought.
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