Matt Levine has a recent piece discussing how discovering the history of sexual harassment complaints about a company’s leadership is becoming part of standard due diligence before an acquisition. Implicitly, the threat of liability, and presumably the costs of a public relations scandal, are material to the value of the company being acquired.
Perhaps relatedly, the National Venture Capital Association has added to its Model Legal Documents a slew of policies related to harassment and discrimination, codes of conduct, attracting and retaining diverse talent, and family friendly policies. Rumor has it that venture capitalists will now encourage companies they invest in to adopt these tested versions of the policies, much as an organization would adopt a tested and well-understood technical standard.
I have in various researcher roles studied social movements and political change, but these studies have left me with the conclusion that changes to culture are rarely self-propelled, but rather are often due to more fundamental changes in demographics or institutions. State legislation is very slow to move and limited in its range, and so often trails behind other amassing of power and will.
Corporate self-regulation, on the other hand, through standards, contracts, due diligence, and the like, seems to be quite adaptive. This is leading me to the conclusion that a best kept secret of cultural change is that some of the main drivers of it are actually deeply embedded in corporate law. Corporate law has the reputation of being a dry subject which sucks in recent law grads into soulless careers. But what if that wasn’t what corporate law was? What if corporate law was really where the action is?
In broader terms, the adaptivety of corporate policy to changing demographics and social needs perhaps explains the paradox of “progressive neoliberalism”, or the idea that the emerging professional business class seems to be socially liberal, whether or not it is fiscally conservative. Professional culture requires, due to antidiscrimination law and other policies, the compliance of its employees with a standard of ‘political correctness’. People can’t be hostile to each other in the workplace or else they will get fired, and they especially can’t be hostile to anybody on the basis of their being part of a protected category. This has been enshrined into law long ago. Part of the role of educational institutions is to teach students a coherent story about why these rules are what they are and how they are not just legally mandated, but morally compelling. So the professional class has an ideology of inclusivity because it must.