Next-generation enterprise and systemic design

With the crises of the climate emergency and spiraling inequality, the time is now past that corporations can act as though serving financial shareholders is their highest duty. That much has been conceded even by CEOs of America’s largest corporations, who in a 2019 Business Roundtable statement said serving a broader set of stakeholders is the new corporate purpose. Yet missing from that conversation is the truth that what must shift is ownership. 

What must change is the structural design and ownership of the corporation itself. We need to envision and create an entirely new concept of the company—a just and democratic firm—designed for a new mandate: to serve broad well-being and the public good. The just firm is the only kind of firm that ultimately can be permitted to exist. It is time to make the profit-maximizing, shareholder-controlled corporation obsolete.

Since the 1970s, a range of new forms for the organization of economic activity around democratic enterprises have been advancing—employee ownership, B Corps, public banks, community land trusts, impact investing. Many of these were literally invented by activists and progressive intellectuals, and each now forms an important part of the democratic economy ecosystem. Now is the time to advance these and other forms of new invention for the 2020s and beyond. Such enterprises are harbingers of an emerging archetypal model, which can become the North Star as we approach the day we can tackle the larger challenge of redesigning large corporations for the public good.

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