Bite-Sized Business Law

When Companies Act Like Countries: Inside Corporate Power and the Politics of Change

The Corporate Law Center at Fordham University School of Law Episode 85

What happens when corporations start to look and act more like states, including jumping into political debates and providing services that we traditionally expect from government? Matteo Gatti, professor of business law at Rutgers Law School, unpacks his new book, Corporate Power and the Politics of Change, the culmination of years studying how business decisions interact with democratic institutions and social movements. Matteo discusses the history of the corporation from early state-serving charters and infrastructure projects to today’s corporate responsibility debates and culture wars. Matteo introduces his concept of “corporate governing” and explains how corporate speech and corporate action now interact with politics and social movements. The conversation also delves into the incentives and risks for companies that enter into socio-political advocacy, the democratic and institutional costs of relying on corporations to fill public gaps, and why standard corporate governance tools are a poor fit for public governance. Join the conversation to find out what lies ahead for the corporate landscape and what corporate power looks like when companies start acting like countries. Tune in now!

Key Points From This Episode:

  • How Professor Gatti became interested in the intersection of corporate power and politics. 
  • The evolution of corporations and the role they played in providing public functions.
  • Hear how a shift in expectations caused companies to engage with socio-economic issues.
  • Learn what “corporate governing” is and the interplay between corporations and government.
  • Key drivers behind the rise in corporate advocacy and the cost of remaining silent.
  • What changes in politics have created a backlash against corporate responsibility.
  • Explore whether corporate governance is good for democracy and public governance.
  • Unpack the undemocratic nature of corporate decision-making and its impact on politics.
  • Why government solutions are more general, stable, and durable than corporate initiatives.
  • His critique of leveraging tools from corporate governance for solving socio-economic issues.
  • Lessons about the importance of authenticity, stakeholder expectations, and political risk.
  • Professor Gatti’s future outlook and his proposals for revitalizing public governance.

Links Mentioned in Today’s Episode:

Professor Matteo Gatti 

Professor Matteo Gatti on LinkedIn

Corporate Power and the Politics of Change

European Corporate Governance Institute (ECGI)

Fordham University School of Law Corporate Law Center