The Fallacy of Corporate Moral Agency

218 Pages·2015·0.4 MB·English

by  David Rönnegard (auth.)

Issues in Business Ethics 44
David Rönnegard
The Fallacy
of Corporate
Moral
Agency
Issues in Business Ethics
Volume 44
Serieseditors
WimDubbink,DepartmentofPhilosophy,SchoolofHumanities,
TilburgUniversity,Tilburg,Netherlands
MolliePainter-Morland,NottinghamBusinessSchool,CollegeofBusiness
Law&SocialScience,Nottingham,UnitedKingdom
Moreinformationaboutthisseriesathttp://www.springer.com/series/6077
David Rönnegard
The Fallacy of Corporate
Moral Agency
123
DavidRönnegard
Stockholm
Sweden
ISSN0925-6733 ISSN2215-1680 (electronic)
IssuesinBusinessEthics
ISBN978-94-017-9755-9 ISBN978-94-017-9756-6 (eBook)
DOI10.1007/978-94-017-9756-6
LibraryofCongressControlNumber:2015936147
SpringerDordrechtHeidelbergNewYorkLondon
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Abstract
This book is a philosophical analysis of the corporation in society that spans the
disciplines of Ethics, Law, Economics, and Political Philosophy. Part I poses a
meta-ethicalchallenge to the position, generally accepted in Business Ethics, that
acorporationqualifiesasamoralagent.Themostprominenttheoriesofcorporate
moralagencyareanalysedbyevaluatingiftheycansatisfythethreenecessarymoral
agencyabilities of intentionality,autonomy,andan ability to act. PartI concludes
that, metaphysically speaking, the corporation itself does not qualify as a moral
agent, in part because the morally relevant sense of the abilities of intentionality
and autonomy require awareness on behalf of the agent. Therefore, corporations
cannotbemorallyresponsibleasdistinctfromtheirmembers.Attributionsofmoral
responsibilitytocorporationsareatbestanellipticalwayofreferringtoindividual
corporatememberswhomaybemorallyresponsible.
Part II proceeds from the premise that the corporation is not a moral agent.
It seeks to descriptively evaluate what the corporation is and to prescriptively
evaluatewhatrolethecorporationoughttohaveinsociety.Bytracingthehistorical
developmentofthecorporatelegalforminEnglishandAmericanlaw,itisargued
thatdescriptivelythecorporateformisprimarilyalegalagent.Itisalsomaintained
thatthe corporationisa legalfictiongrantedto associationsof individuals,andas
suchitisdescriptivelyaninstrumentofthestate.
Part II then proceeds to prescriptively argue that the corporation also ought
to be an instrument of the state. As such, the state may legitimately regulate
corporate actions to be in accord with national goals of social welfare. It is
highlighted that although the corporate legal form is an instrument of the state,
actual corporations are the instruments of their incorporators. Part II then takes
issue with the prescriptions of the Corporate Social Responsibility movement
whichmaintainthatawiderconstituencyofstakeholdersthanmerelyshareholders
ought to be considered in managerial decision-making. It is argued that many of
the prescriptions of CSR are very difficult to uphold unless one also mistakenly
advocates corporate moral agency. Furthermore, the issues that CSR wishes to
v
vi Abstract
tackle are better addressed through public initiatives and legal enactments by the
government. The normative force of the argument is that citizens of democratic
states ought to primarily make calls for legal enactments in order to hold the
corporatelegalinstrumentsaccountabletotheirpreferences.
Contents
PartI TheFallacyofCorporateMoralAgency
1 TheImportanceofCorporateMoralAgency ........................... 5
References.................................................................... 8
2 NecessaryConditionsforMoralAgency................................. 9
References.................................................................... 15
3 CorporateIntentions....................................................... 17
3.1 ExplicationofPeterFrench’sConceptionofCorporate
MoralAgency ........................................................ 18
3.2 TheMetaphysicsofIntentionsandItsMoralRelevance........... 22
References.................................................................... 29
4 CorporateActions.......................................................... 31
4.1 AreCorporateAgentsAutonomous?................................ 34
4.2 Freevs.Non-freeAgents ............................................ 38
4.3 EmergentCorporateMoralAgency?................................ 41
References.................................................................... 48
5 CorporateAutonomy....................................................... 51
References.................................................................... 55
6 SummaryofWhyCorporateMoralAgencyIsaFallacy .............. 57
6.1 Autonomy ............................................................ 57
6.2 Intention .............................................................. 58
6.3 Action................................................................. 58
Reference..................................................................... 59
7 The Reference of Corporate Proper Names
andResponsibilityAttributions........................................... 61
References.................................................................... 71
vii
viii Contents
8 CorporateCollectiveMoralAgency...................................... 73
8.1 Joint/SharedIntentions............................................... 74
8.2 Group/CorporateIntentions.......................................... 78
8.3 CorporateCollectiveIntentions...................................... 81
References.................................................................... 90
9 Conclusion:LegitimateandIllegitimateCorporateMoral
ResponsibilityAttributions................................................ 91
9.1 MoralResponsibilityAttributiontoaCollectiveWhole........... 91
9.2 MoralResponsibilityAttributiontoaCorporateStructure......... 93
9.3 MoralResponsibilityAttributiontoaUnanimously
IntendingCollective.................................................. 94
9.4 Elliptical Moral Responsibility Attribution
toaCollectiveWhole ................................................ 97
References.................................................................... 99
PartII TheRoleoftheCorporationinSociety
10 TheRoleoftheCorporationinSociety:TheDescriptiveView ....... 103
10.1 TheFirstCorporations............................................... 104
10.2 TheLegalDebateAbouttheNatureoftheCorporation ........... 105
10.3 TheShareholderPrimacyNorm..................................... 108
10.4 The Separation of the Corporation from
theShareholdersandtheEmergenceoftheCorporate
ShareasanAutonomousFormofProperty......................... 118
10.5 TheLimitedLiabilityofShareholders.............................. 122
10.6 TheReificationoftheCorporation(andthe Legal
InfluenceoftheTheoriesAbouttheNatureoftheCorporation)... 128
10.7 TheCorporationasSocio-economicInstrument.................... 136
References.................................................................... 140
11 TheRoleoftheCorporationinSociety:ThePrescriptiveView....... 143
11.1 Oughtthe CorporateLegalForm to Be Used as
anInstrumentoftheState?........................................... 144
11.1.1 TheProblemwiththeDescriptiveClaims
oftheNexus-of-ContractsTheory......................... 145
11.1.2 TheProblemwiththeLibertarianPrescription
forAbsolutePropertyRights............................... 149
11.2 TheWrongwiththeCorporateSocialResponsibility
Movement ............................................................ 157
11.2.1 ThePhilosophicalFoundationsoftheCSRMovement... 157
11.2.2 ShareholderTheoryvs.CSR............................... 164
11.2.3 TheRationalityoftheShareholderPrimacyNorm....... 182
Contents ix
11.3 TheDivisionBetweenPublicandPrivateCorporate
Responsibilities....................................................... 185
11.3.1 ThePublic/PrivateDistinction............................. 186
11.3.2 TheMarketasaZoneofMoralException................ 192
11.3.3 TheJustificationforStateRegulation ..................... 199
11.4 Summary:TheRoletheCorporationOughttoPlayinSociety.... 205
References.................................................................... 206
Conclusion ........................................................................ 209
Bibliography ................................................................. 213