After the Enron scandal several years back, business law has had to deal with the fallout of some business behaviors that became apparent. The corporate world was shaken to its core and forced to re-examine its policies and procedures and in fact, it’s very responsibility to groups who were not even shareholders.
The law of business in America has had to be modernized somewhat. The Colonial big business attitudes of profits at all costs may have been degraded by bits over the years, but this particular case crushed some of the last vestiges of its stronghold on the corporate world. No longer were profits to the shareholders of a company the main concern with disregard to responsibilities and duties elsewhere.
Fiduciary duties of top management in business have been put under the microscope and subsequently been made a higher priority. This means that besides protecting the assets and profits of the business for the shareholders, there must also exist due care and responsibility to other matters of public interest. These matters have been listed as:
· The Environment
· Human Rights
· Public Health and Safety
· The Welfare of the Community
· Employee Dignity
While the matter of incorporating these matters into business law may not be finished yet, the business world and top executives in particular have had to sit up and take notice of what is going to be expected of them from now on.
The world of big business must now ensure that they are their own watchdogs within their organizations to some degree. They are to be aware of how their business dealings affect these other groups and take some responsibility for that. They must be weary of deals that will increase their profits at the expense of these groups. This is indeed the last crumbling wall of the colonial (now American) exploitative spirit.
One of the biggest effects on corporate America is the need for business lawyers who can help guide them through this new world of restrictions that threaten to make them vulnerable. They are under scrutiny and they need the expertise of lawyers to help them develop new policies and new ways to define their responsibilities as part of the community. Especially now that this new code for business responsibility at the top of the ranks is forming and developing, any big business will not want to risk falling behind in conforming to these new expectations.
While Enron may be a big example, all businesses must take heed of the new credo. Business at the expense of humans, environment is not acceptable. Executives hiding behind the almighty “making a buck for my shareholders” must remember that they are now also responsible to the community at large.
Business lawyers are in demand now and they will continue to be for some time. They are needed in helping the business world meet their responsibilities in a much better way.