In the build-up to the writing up of my paper which is a critique of corporate personhood as a legal fiction for the LW928 Law and Humanities modules, as I was researching, I realised that there are many other ways at which we could look at corporate personhood. From philosophical, organisational to psychological and sociological dimensions- the corporate person does not only have legal implications, something that we often forget as lawyers. I have thus decided to concentrate on the philosophical side of the concept and analyse moral personhood for two of my blog posts. This first post will be about two arguments in favour of moral personhood.

It is also helpful to first set out that the corporate personhood is a legal fiction, in the way that, put very simply, the law treats it as a person but we all know that it is not a ‘natural’ person in a literal manner.

Firstly, moral philosophy believes that corporations, along with their legal rights and duties, also have moral rights and duties. Just like natural persons, corporations should bear the consequences of their actions and assume responsibility for them.[1]

“The presence or absence of corporate moral personhood determines whether corporations are subject to blame for their failure to meet [their moral] obligations.”[2]

Philosophers in favour of the corporation having moral responsibility theorise that the corporation has both the intentionality and ability to act. This means that, despite the fact that a corporation depends on natural persons to run it, all the moral responsibilities and duties cannot be solely attributed to them. By colluding to make up the corporation, which claims rights as an individual ‘person’ under the Bill of Rights, the actions of the each of the individuals become one big corporate action. The underlying principle being that if the corporation wants to claim rights as a person, it should be as liable as a natural person would be when it engages in ‘immoral’ actions.

“It is not always appropriate to limit moral responsibility to the
individual members of the corporation because sometimes immoral
corporate actions are the result of a series or combination of blameless
primary individual actions. No one person is at fault for the harm
caused by the collective corporate act.”[3]

It is quite hard to track who has done what in large corporations and tracking who is to blame when decisions go wrong can be somewhat an impossible task in large corporations. It will most probably be a combination of the actions of multiple individuals. Hence proponents of the moral corporate responsibility theory think it is easier to attribute the burden to the corporation as a whole.

Secondly, philosophers have found a different way to establish corporate moral personhood by projecting the moral features of human beings onto the corporation. Goodpaster and Matthews argue that ‘rationality’ and ‘respect’ are the two components that make the human beings morally responsible.[4] By way of analogy, because corporations possess the ability to research, calculate risks and evaluate the potential impact of that some decisions might have, they prove that they can be both rational and can show respect. They can thus be considered to be moral persons. As giant business and financial players, corporations might actually have access to more information than a normal individual will ever have which cements the argument that they should be moral ‘person’ even more.

The overall underlying justification of those in favour of moral personhood for the corporation is that if the latter wants to have the same rights as a person, it should also have the same moral responsibilities. For them, the corporations have no excuse to not be morally responsible as it possesses more than enough resources to take sound decisions that are not harmful to society.

[1] Paul B. Thompson, Why Do We Need a Theory of Corporate Responsibility? in SHAME, RESPONSIBILITY AND THE CORPORATION 113, 116 (Hugh Curtler ed., 1986).

[2] “Michael J. Phillips, Corporate Moral Personhood and Three Conceptions of the Corporation, (1992)2 Bus. ETHICS Q. 435, 436

[3] Susanna Ripken,  K. “Corporations are people too: a multi-dimensional approach to the corporate personhood puzzle.” (2009) Fordham J. Corp. & Fin. L. 15 : 97.

[4] Kenneth E. Goodpaster & John B. Matthews, Jr.’ Can a Corporation Have a Conscience’ (1982) HARV. Bus. REV;  132, 134.

There is this wide sentiment that corporations are really bad for the society in general because of their contribution to environmental woes for example, or for creating inequalities in wealth distributions in a very capitalistic era. The scale of corporate activity and its influence on everyday life have made people realise how much of a grip these institutions, which are legal fictions,  have on our daily life. This is quite a frightening realisation and people have been vouching for corporations to have moral responsibility and restrictions because after all they have ‘person rights.’

However, attributing them moral responsibility can sometimes not be the best move, however unpopular this assertion might be. In this second blog post about the philosophical dimension of corporate personhood, I analyse the other side of the moral personhood, that is, arguments against corporate moral personhood.

Proponents of this theory argue that the corporation itself cannot have blameworthy intentions but rather, it is the individuals who run it who possess those. Hence, only the individuals can be held morally responsible for their actions.

“Moral personhood requires a certain level of autonomy: moral responsibility for an act can be attributed only to the person who originated the act in his own body, a body over which he or she has direct autonomous control.  Since corporate action never originates in a body belonging to the corporation, but in the bodies of human beings who directly control their own actions, corporations do not originate acts in the manner required for moral responsibility to apply.”[1]

The rationale here being that, since corporate action can never happen without human beings triggering them, the corporations cannot be moral. Here the corporate form wants to be treated as a person under the law but does not want the ‘moral’ responsibility that comes with it as it does not have a ‘body’ its own from which actions can originate. It ironically embraces its fictional side here. Other philosophers have argued that corporations cannot possess the intentionality needed for them to be morally responsible as they do not have minds to think on their own. Whilst others argue that even if we are able to establish intentionality, it would simply not suffice as corporations cannot feel emotions. [2] Whilst human beings can feel regret or remorse for making immoral choices, corporations cannot feel the same, they cannot empathise and this solely invalidates the moral personhood theory.

Secondly, some philosophers fear that granting corporations moral personhood would also mean granting them moral rights. This would mean that corporations would expect to be treated like a person and be respected as such and this is a very uncomfortable notion for society.[3] After all, we would be treating a ‘fiction’ with respect that is normally reserved for human beings. To explain this Ripken invokes Kant and his theory of means and ends;

“According to Kant, all human beings are ends in themselves and should always be treated as such, never as means to another end. In contrast, corporations are human creations that are formed as means to achieve the ends of those human beings who choose to participate in the corporate enterprise. If corporations have the same moral standing as natural persons, then corporations are entitled to the same moral rights, in particular, the right to be treated as an end in itself.”[4]

If they are treated as ends themselves, it would just open the floodgates with both Ladd and Ripken arguing that for example, the closing down of the corporation would be considered to be ‘murder’ as it means it would metaphorically mean that the corporate person is dying. So to avoid these strange assumptions from concretising, the corporations should only just be treated as ‘machines’ that were put in place to advance human ends and should therefore not be given moral personhood and have moral rights and responsibilities. [5]

[1] Susanna Ripken,”Corporations are people too: a multi-dimensional approach to the corporate personhood puzzle.” (2009) Fordham J. Corp. & Fin. L. 15 : 97.

[2] Rita C. Manning ‘Corporate Responsibility and Corporate Personhood’, (1984) 3 J. Bus. ETHICS 77, 80

[3] John Ladd, Morality and the Ideal of Rationality in Formal Organizations, (1970) 54

MOIST 488, 500

[4] Ripken at 123

[5] Ibid