Can Firms Act Morally?

Abstract The firm is a critical actor in the formation of a new moral political economy, but firm structure, culture, and profits can be an obstacle to change. The case of the American technology industry demonstrates the limits of relying on firms to change from within. The widespread practice of awarding stock ties white-collar compensation to corporate performance and curtails employee activism. The high-tech venture capital model measures success using rapid return on investment and acquisition of market share. Corporate governance practices and dual-class shares give founder-CEOs outsized control and entrench existing business models, even when they have damaging downstream consequences. The trajectory of these purportedly purpose-driven companies indicates that, as in the past, regulation may be the most effective path to meaningful corporate reform.