The History and Future of the American Corporation

Jeff MendelsohnNew Leaf Paper

Inathree‐hourperiod,theBostoniansturnedapproximately120,000poundsofdryteainto“harbortea.”Somuchwasdumpedthattheteapiledupintheshallowwaterandthreatenedtospillbackontothedecks.

YoucanreadtheConstitutionfromfronttoback,including

alltheamendmentsaddedtothedocumenttothepresentday,

andnotseeasingleinstance

oftheword“corporation.”

TheDNAofcorporatecode

Influencesbehavior.

Corporationsarethemostpowerfulforceonearth.

Let’sharnessthispowerforgood.

Ancient Forests and the Paper Industry •  80% of the world’s large tracts

of ancient forests have already been logged.

•  76 countries have lost all of their original forest cover

•  1/3 of all trees logged are used for paper production

•  Global paper consumption is expected to double in the next 15 years

SOURCE: www.marketsinitiative.org

© 2008 New Leaf Paper. All rights reserved. New Leaf Paper www.newleafpaper.com 888-989-5323

Our mission is to inspire ~ through our success ~

a fundamental shift toward sustainability in the paper industry.

WehaveasayingatNewLeaf

“Therearenobadpeople,thereareonlybadsituations.”

ThecurrentDNAofthecorporationisabadsituation.

Sustainablebrands?

Allbrandsshouldbesustainable.

Whocameupwithourcorporatecode?

Howhasitevolvedovertime?

Thecorporateform,characterizedbyacharterandjoint‐stockownership,wasnotthetypicalwaybusinesseswere

organizedinthecolonies.

Mostbusinesseswereownedbyfamilies

orpartnerships.Theyhadnocorporatecharters,nordidtheyneedthem.

•  AtthetimeoftheConstitutionalConventionin1787,onlysixbusinesscorporationsotherthanbanksexistedintheUnitedStates:– onefororganizingafisheryinNewYork– oneforconductingtradeinPennsylvania– oneforconductingtradeinConnecticut– oneforoperatingawharfinConnecticut– oneforprovidingfireinsuranceinPennsylvania– oneforoperatingapierinBoston

•  Theirvisionwastosubordinatecorporationstodemocraticoversight,thenmakeuseofthistamedinstitutionasatoolformeetingthepent‐upneedforinfrastructuresuchasroadsandbridges.

•  Suchanotionof“good”corporationsderiveddirectlyfromtheexperienceofWashingtonandFranklin,amongothers.

•  JamesMadisontwiceproposedputtingthefederalgovernmentinchargeofcorporations“incaseswherethepublicgoodmayrequirethemandtheauthorityofasinglestatemaybeincompetent.”

•  AtthetimeoftheConstitutionalConventionin1787,onlysixbusinesscorporationsotherthanbanksexistedintheUnitedStates:– onefororganizingafisheryinNewYork– oneforconductingtradeinPennsylvania– oneforconductingtradeinConnecticut– oneforoperatingawharfinConnecticut– oneforprovidingfireinsuranceinPennsylvania– oneforoperatingapierinBoston

1809.VirginiaSupremeCourt

Statedthatachartershouldnotbe

grantediftheapplicant’s

“objectismerelyprivateorselfish;

ifitisdetrimentalto,

ornotpromotiveof,thepublicgood….”

Anti‐corporatesentimentshouldnotbeconfusedwithanti‐businesssentiment.

Inthepublicmind,theuseofthecorporateformwasassociated

withmonopolyprivileges

ofonesortofanother.

QUASI-RIGHT AVAILABLE AVAILABLE TO WHEN? TO PEOPLE? CORPORATIONS?

Limited liability No Gradual statutory revision 1820- for shareholders by states 1900 Perpetual existence No Switch by states from late

custom charters to general 1800s incorporation

Virtual location No New Jersey general incorporation 1889 law

Indefinite entity or No New Jersey general incorporation 1889 “shape shifting” law Protection from No Judicial revision of 1850- lawsuits common law tort; statutory present

immunities for particular industries

TheDNAofcorporatecode

influencesbehavior.

Corporationsarethemostpowerfulforceonearth.

Let’sharnessthispowerforgood.

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