The Fallacy of Corporate Moral Agency

Part I The Fallacy of Corporate Moral Agency

When events take place within the context of satisfying corporate goals, we may ask, who is morally responsible for the resulting consequences? This question concerns the identiﬁcation of the proper bearer of moral responsibility. It is uncontroversial that corporations are legal agents that may be attributed with legal responsibilities. However, can corporations also be moral agents that are the proper subjects of moral responsibility attributions?1 The concept of corporate moral agency (also known as corporate moral personhood) is for many an important implicit assumption within business ethics. This is in part due to the desire to qualify the “business” as a unit of ethical analysis for its actions (see, e.g.: Collier 1998), as well as the desire to identify a placeholder for moral responsibility attributions when no moral responsibility can be found with the corporate members (see, e.g.: Werhane 1989). Corporate moral agency implies that corporations can be the proper bearers of moral responsibilities in a manner that is distinct from their human members. This does not mean that the corporation can perform any actions without its members, but it does mean that the corporation can be morally responsible as a unit that is considered distinct from its members. As such, corporate moral agency needs to be kept separate from notions of collective moral responsibility that attribute moral responsibility to corporate members.2

1A corporation is formally deﬁned as an association that is given legal status by a state charter to operate as a single unit with limited liability over an indeﬁnite period of time. It is however clear that the type of entities commonly referred to as corporations do not merely have a manifestation in law but are also organizations comprised of individuals. For the current discussion on corporate moral agency I shall not merely consider the corporation in this narrow legal sense, because otherwise it would be a category mistake to speak of the moral agency of a purely legal entity. I shall regard corporations as goal directed organizations comprised of human members. 2The distinction between corporate moral responsibility and collective moral responsibility is not always made clearly enough. On the one hand, corporate moral responsibility involves agency that is logically distinct from the corporate members and thus moral responsibility is attributed to the corporation even when no member is morally responsible. On the other hand, collective moral responsibility requires that at least someone within the collective is morally responsible. On some interpretations one or more responsible individuals may represent a group such that the 2 I The Fallacy of Corporate Moral Agency

Over the years most thinkers on the subject have tended to support various conceptions of corporate moral agency (e.g.: De George 1981; Donaldson 1982; Dub- bink and Smith 2011; French 1984; Goodpaster 1983;Hess2013; Manning 1984; Moore 1999; Ozar 1985; Phillips 1992; Seabright and Kurke 1997; Soares 2003; Werhane 1985), while Ladd (1970), and Velasquez (1983, 2003) are exceptions. As we shall see, it will become important to distinguish between the mere semantics of acknowledging the way we speak about corporations on the one hand and substantial metaphysical arguments for the moral status of the corporation on the other hand. I am assuming (and I believe it is uncontroversial) that moral responsibility attributions are only legitimate to moral agents. Given this assumption, what we need to do is to establish whether a corporation is a moral agent without augmenting our basic notions of what a corporation is and what a moral agent is. The aim is to see if we can move from an understanding of the uncontroversial attributions of moral responsibility to individuals (the sense which we are primarily familiar with) to an understanding of attributions of moral responsibility to corporations (or collectives of individuals) without a significant shift in meaning. The goal is not to construe the corporation as a moral agent by any means possible, but rather to explore if the corporation possesses certain necessary characteristics for moral agency. The main tenet of my argument is that the corporation cannot be considered a moral agent primarily because, metaphysically speaking, there is no moral agency that arises or exists that is distinct from the moral agency of the individual members that comprise the organization. The arguments to be made against the various positions of corporate moral agency hinge importantly on what we take to be the necessary characteristics for the metaphysical status of moral agency. There appears to be very little consensus in the field of moral philosophy with regard to necessary and sufficient conditions for moral agency. Therefore I shall proceed by arguing from some fairly uncontroversial necessary conditions with the aim of showing that if these cannot be met then my argument against corporate moral agency will be even more robust than if I rely on a more controversial full blown account of necessary and sufficient conditions for moral agency. I shall assume that the ability to intend an action, the ability to carry out an intentional action, and the ability to choose an intentional action autonomously are necessary conditions for moral agency. I shall start by first explicating these three necessary conditions for moral agency. Given these necessary conditions for moral agency I shall consider the positions of several philosophers with regard to the moral status of corporate entities themselves conceived as logically distinct from their members.

entire group is considered morally responsible. Keeping the distinction between corporate moral responsibility and collective moral responsibility in mind is important because with the latter the agency is entirely dependent on the abilities of the members while with the former it is not. References 3

I then go on to discuss what it is we are referring to when we us corporate names as the subjects of corporate moral responsibility attributions. In other words I discuss what the reference of a corporate proper name is in the context of attributing moral responsibility. This inquiry is the ﬂipside of analysing whether or not corporations are moral agents because only moral agents can legitimately be attributed with moral responsibility. Next, I suggest that one may construct better theories of corporate moral agency by making corporate moral agency contingent on the moral agency of corporate members rather than being logically distinct from the members. I show, with the aid of theories of collective intentionality, that one can have certain collectives of individuals towards whom corporate moral responsibility attributions are legitimate. Finally, I conclude with a classiﬁcation of legitimate and illegitimate corporate moral responsibility attributions. The structure of Part I is3: • Chapter 1: The Importance of Corporate Moral Agency • Chapter 2: Necessary Conditions for Moral Agency • Chapter 3: Corporate Intentions • Chapter 4: Corporate Actions • Chapter 5: Corporate Autonomy • Chapter 6: Summary of Why Corporate Moral Agency Is a Fallacy • Chapter 7: The Reference of Corporate Proper Names and Responsibility Attributions • Chapter 8: Corporate Collective Moral Agency • Chapter 9: Conclusion: Legitimate and Illegitimate Corporate Moral Responsi- bility Attributions

References

Collier, Jane. 1998. Theorising the ethical organization. Business Ethics Quarterly 8: 621–654. De George, R.T. 1981. Can corporations have moral responsibilities? University of Dayton Review 5: 3–15. Donaldson, T. 1982. Corporations and morality. Englewood Cliffs: Prentice Hall. Dubbink, W., and J. Smith. 2011. A political account of corporate moral responsibility. Ethical Theory and Moral Practice 14: 223–246. French, P.A. 1984. Collective and corporate responsibility. New York: Columbia University Press. Goodpaster, K.E. 1983. The concept of corporate responsibility. Journal of Business Ethics 2: 1–22. Hess, K.M. 2013. “If you tickle us :::”: How corporations can be moral agents without being persons. Journal of Value Inquiry 47: 319–335. Ladd, J. 1970. Morality and the ideal of rationality in formal organizations. The Monist 54: 488–516.

3Chapters 1, 2, 3, 4,and5 in part draw on Rönnegard (2013). 4 I The Fallacy of Corporate Moral Agency

Manning, R.C. 1984. Corporate responsibility and corporate personhood. Journal of Business Ethics 3: 77–84. Moore, G. 1999. Corporate moral agency: Review and implications. Journal of Business Ethics 21: 329–334. Ozar, D.T. 1985. Do corporations have moral rights? Journal of Business Ethics 4: 277–281. Phillips, M.J. 1992. Corporate moral personhood and three conceptions of the corporation. Business Ethics Quarterly 2: 435–459. Rönnegard, D. 2013. How autonomy alone debunks corporate moral agency. Business and Professional Ethics Journal 32(1–2): 77–106. Seabright, M.A., and L.B. Kurke. 1997. Organizational ontology and the moral status of the corporation. Business Ethics Quarterly 7(4): 91–108. Soares, C. 2003. Corporate versus individual moral responsibility. Journal of Business Ethics 46: 143–150. Velasquez, Manuel G. 1983. Why corporations are not morally responsible for anything they do. Business and Professional Ethics Journal 2: 1–18. Velasquez, Manuel G. 2003. Debunking corporate moral responsibility. Business Ethics Quarterly 13: 531–562. Werhane, P.H. 1985. Persons, rights, & corporations. Englewood Cliffs: Prentice Hall. Werhane, Patricia H. 1989. Corporate and individual moral responsibility: A reply to Jan Garrett. Journal of Business Ethics 8: 821–822.