Reflections on Corporate Moral Responsibility and the Problem Solving Technique of Alexander the Great

“It is the corporation’s CID structure that allows it to be an independent rational actor on the social scene, and that converts various human behaviors and actions into corporate intentional action” (Ibid., p. 15).

Indeed, French concedes that his earlier work embodies the same assumption, which he now recognizes to be incorrect.

At the base of my earlier view was the widely-held position that intentionality should be understood in terms of a desire/belief complex. That position is flawed; indeed, it is downright wrong…. Corporations cannot, in any normal sense, desire and believe. In my earlier accounts I redescribed desires and beliefs into corporate policy in order to match the model. Many objected that I had overly formalized the notions of desire and belief to fit the Corporate Internal Decision (CID) Structure approach I had created. With them I am now prepared to say that if intention is no more than desires and beliefs, then corporations will fail to make it as intentional actors (French 1996, p. 148–149).

In fairness, I should note that I am not the first to suggest this. For example, John Danley previously argued that ascribing moral responsibility to corporations is merely “a prelude to many further permissible or obligatory moves” such as being required to pay compensation or be subject to punishment, and that any consideration of the question was “incomplete without incorporating the role it plays in relation to these other moral moves. It is this which is lacking from the previous discussion of ‘intend.’” (Danley 1990, p. 205). Similarly, Manuel Velasquez pointed out that “the concept of moral responsibility is conceptually connected to the concepts of blame and punishment” such that ascribing moral responsibility to a corporation entails “claiming that there are some people in the corporation who should be blamed and punished.” (Velasquez 1983, pp. 10–13). In addition, Christopher McMahon explicitly considered the practical consequences of attributing moral personhood to corporations to demonstrate that “there are moral reasons for denying them the moral status that personhood usually brings with it.” (McMahon 1995, p. 547).

Strictly speaking, this is not accurate. In a world with corporate moral responsibility, corporations would be eligible for rewards as well as punishments as collective entities. Moral responsibility implies that one is liable to both praise and blame. However, in the present context, the focus is usually on whether corporations may be held liable for wrongdoing rather than whether they may be treated as a proper recipient of reward. Hence, for purposes of concision, I will speak strictly in terms of liability for wrongdoing in the remainder of this article.

The Oxford English Dictionary gives the definition of “punish” as “an act of a superior or of public authority: To cause (an offender) to suffer for an offence; to subject to judicial chastisement as retribution or requital, or as a caution against further transgression; to inflict a penalty on.” The Encyclopedia of Philosophy lists the essential characteristics of punishment as follows:

Characteristically, punishment is unpleasant. It is inflicted on an offender because of an offense he has committed; it is deliberately imposed, not just the natural consequence of a person's action (like a hang-over), and the unpleasantness is essential to it, not an accidental accompaniment to some other treatment (like the pain of the dentist's drill). It is imposed by an agent authorized by the system of rules against which an offense has been committed; a lynching is not a standard case of punishment. (Benn 1972, p. 29)

At present, corporations are subject to criminal punishment as collective entities. However, the legal standard of corporate criminal liability has been under sustained critical attack by criminal law scholars for decades. See Symposium: Achieving the Right Balance: The Role of Corporate Criminal Law in Ensuring Corporate Compliance, American Criminal Law Review (2009) 46, 1323–1534. An important part of the practical significance of the corporate moral responsibility debate is that a demonstration that corporations were not morally responsible entities would greatly strengthen the hand of the academic critics of corporate criminal liability.

It is worth noting that this claim is not obviously correct. In the absence of corporate moral responsibility, corporations are nevertheless civilly liable for the wrongs of their employees. Any intentional wrongdoing or reckless conduct by corporate employees that harmed the interests of third parties would subject the corporation to potentially massive compensatory and exemplary damage awards. It is not obvious that the threat of the relatively small criminal penalties that would be added if corporations could be held morally responsible as well would add any noticeable deterrent effect. However, I do not intend to quibble over this point. In this article, I will assume that the threat of corporate punishment can produce increased efforts at corporate self-policing. This will certainly be the case with regard to regulatory violations or other infractions that do not directly harm third parties where the threat of civil liability is not present; and because of the damaging effect criminal charges can have on a corporation’s reputation, it may well be the case generally.

See Art. 5(3), American Convention on Human Rights (Pact of San José) (1969), entered into force 18 July 1978, 1144 UNTS 123 (“[p]unishment shall not be extended to any person other than the criminal”) and Art. 7, African Charter on Human and Peoples’ Rights (1981)) entered into force 21 October 1986, OAU Doc. CAB/LEG/67/3 Rev. 5 (“[p]unishment is personal and can be imposed only on the offender”).

See Art. 33(1), Geneva Convention IV Relative to the Protection of Civilian Persons in Time of War (1949).

In fact, none of Andersen’s employees were guilty of criminal wrongdoing because the Supreme Court overturned Andersen’s conviction on the ground that the government had not proven the consciousness of wrongdoing required by the crime (Andersen 2005).

Indictments were brought against corporate executives such as Andrew Fastow, Jeffery Skilling, and Ken Lay in the individual capacity, not against Enron as a corporate entity.

We leave aside the question of the punishment falling on innocent employees and customers for the moment.

I am grateful to anonymous reviewers for pointing these potential objections out to me.