One of the fundamental problems with the current corporate structure is that for-profit corporations are legally required to maximize profits. With profit as the primary objective, anything that takes away from it (like higher wages or stronger environmental practices) leaves the corporation vulnerable to being sued by its shareholders. Henry Ford was famously sued in 1919 by his shareholders when he tried to end dividends to them in order to decrease the cost of his cars and increase the number of people he employed. Ford lost and the court ruled that a corporations’ responsibility was to its shareholders and not to the community or its workers.
As a result of this mandate, wages remain stagnant while corporate profits soar. The profit motive also prevents corporations from investing in sound environmental practices because it is a cost that does not necessarily lead to increased profit. Instead, the public assumes the risk and cost of environmental degradation while corporations increase their profit margins. The relentless drive for profit means that businesses can either make profit or they can be socially responsibly, but they cannot be both.