Corporations wield power in today’s economies, and political theories of the corporation argue about the legitimacy conditions of corporate power. This paper argues in favour of a double-fiduciary theory for corporations. Based on a concession theory of markets, it sees all markets as authorized by states (in the name of society), for the purpose of creating economic value, or wealth. Hence corporations, as much as non-incorporated firms, have a fiduciary duty to the state/society to create wealth, in (...) the competitive structure of the market. However, their pursuit of wealth often creates unbalanced relations of power between corporations and their stakeholders, which can at some point be classified as instances of domination. Therefore, corporations need to be subjected to a second fiduciary duty, i.e. not to dominate others in the economy. This duty is also, in the final instance, owed to the state/society. In an era when everyone can incorporate their business, states/societies can be interpreted as having, through corporate law, mandated shareholders as ‘proximate beneficiaries’, to incentivize corporations to create wealth. Now states/societies need to think about how to prevent corporations from dominating others. New mechanisms of accountability towards stakeholders and/or citizens as proximate beneficiaries are needed. Only in this way can corporations be effectively held to account for both of the fiduciary duties which characterize their normative status. (shrink)

Abstract:This paper investigates whether, in theoretical terms, corporations can be citizens. The argument is based on the observation that the debate on “corporate citizenship” (CC) has only paid limited attention to the actual notion of citizenship. Where it has been discussed, authors have either largely left the concept of CC unquestioned, or applied rather unidimensional and decontextualized notions of citizenship to the corporate sphere. The paper opens with a critical discussion of a major contribution to the CC literature, the (...) work of Logsdon and Wood (Wood and Logsdon 2001; Logsdon and Wood 2002). It continues with a consideration of the nature and role of metaphors for business and of the contestable nature of the political concept of citizenship. It evaluates corporations as citizens through a four-dimensional framework of democratic citizenship offered by Stokes (2002). The analysis suggests that corporations do not easily fit the “liberal minimalist” model of citizenship. It finds, however some possibilities for fit with the three more participatory models. The paper concludes by cautioning against basing corporate citizenship on legal and administrative status or identity, and mapping out specific criteria by which we might determine whether corporations could be considered as citizens by virtue of their participation in processes of governance. (shrink)

ABSTRACT:In a series of reports the United Nations Special Representative on the issue of Human Rights and Transnational Corporations has emphasized a tripartite framework regarding business and human rights that includes the state “duty to protect,” the TNC “responsibility to respect,” and “appropriate remedies” for human rights violations. This article examines the recent history of UN initiatives regarding business and human rights and places the tripartite framework in historical context. Three approaches to human rights are distinguished: moral, political, and (...) legal. It is argued that the tripartite framework’s grounding of the responsibility of TNCs to respect human rights is properly understood as moral and not merely as a political or legal duty. A moral account of the duty of TNCs to respect basic human rights is defended and contrasted with a merely strategic approach. The main conclusion of the article is that only a moral account of the basic human rights duties of TNCs provides a sufficiently deep justification of “the corporate responsibility to respect human rights” feature of the tripartite framework. (shrink)

Michael Hannigan is the CEO and co-founder of Give Something Back Office Supplies, the third largest office supply company on the west coast of the United States. Hannigan began his business in 1991, long before any benefit corporation legislation was enacted. He reincorporated his business as a benefit corporation after California passed such legislation in 2011. On April 23, 2015, he spoke at the 22nd Annual Stakeholder Dialogue Speaker Series convened at the University of St. Thomas, Minneapolis, by Daryl Koehn (...) and the Veritas Institute. His remarks cover the genesis of his interest in socially responsible business and the start of his company. Hannigan also discusses the arc of what he refers to as the “fourth sector”—the emergence of the social enterprise sector. He evaluates where benefit corporations began and shares his reflections on how they may develop in the future. Hannigan’s talk concludes with a short question and answer session with audience members at the event. (shrink)

This article presents an alternative understanding of corporations from the two problematic visions that see corporations as either the shareholders’ property or as nexuses of contracts. The alternative proposed here is based on the theories of pre-eighteenth-century philosophers, particularly Aristotle’s political philosophy, which Thomas Aquinas later refined. The article aims to advance a theory of corporate legal and moral responsibility for human rights based on the conception of corporations as imperfect communities whose purpose is to produce a (...) good or service through participatory work that allows individuals to self-develop while contributing to the community by satisfying consumers’ needs through collaborative work. The critical account of corporations presented here provides a sound foundation upon which to build a justification of corporate responsibility for human rights violations, providing a more accurate description of the reality of a corporation than most mainstream contemporary accounts do. (shrink)

The freedom (or its lack) of employees within large corporations has been the topic of considerable attention. Various discussions have invoked utilitarian appeals, social contract arguments, rights to meaningful jobs and analogies between corporations and state government. After briefly reviewing and rejecting these approaches, this paper contends that the legitimate exercise of corporate authority requires its accountability to a relevant group. It is then argued that the rnost relevant group are the employees over whom such power is exercised (...) and that the form such accountability must take is that of recognizing the right of employees to participate in corporate decisions and actions. Recognition of this right to participation, it is contended, constitutes respect for the freedom of corporate employees. (shrink)

Even in a regulated and competitive market economy the behavior of firms leaves much to be desired. Looking beyond the invisible hand of the market and the iron hand of the law, this chapter outlines and assesses arguments for the intangible hand of civil society. The central mechanisms in our model depend on the importance of social esteem and self-esteem. Such esteem depends on assessments of true intentions and dispositions for costly pro-social actions. Instrumental or reputation-shaping pro-social actions matter little (...) in the economy of esteem. What is required is a common belief that conformity to certain costly standards benefits all; and that conformity is observable and elicits social approval (and vice versa). We acknowledge and review why in the realm of competitive commercial organizations, the challenges may be considerable for the intangible hand model to take hold. Moralizing (or professionalizing) the firm’s agents, inducting the voice of affected parties in the deliberation of firms, public (if strategically delayed) disclosure of internal deliberations, and public commitments by senior leaders all offer promise in enacting an economy of esteem in the world of competitive commercial firms. (shrink)

Today, more corporations disclose information about their environmental performance in response to stakeholder demands of environmental responsibility and accountability. What information do corporations disclose on their websites? This paper investigates the environmental management policies and practices of the 200 largest corporations in the world. Based on a content analysis of the environmental reports of Fortune’s Global 200 companies, this research analyzes the content of corporate environmental disclosures with respect to the following seven areas: environmental planning considerations, top (...) management support to the institutionalization of environmental concerns, environmental structures and organizing specifics, environmental leadership activities, environmental control, external validations or certifications of environmental programs, and forms of corporate environmental disclosures. (shrink)

ABSTRACT:Although a research focus on the increasing involvement of corporations in shaping and maintaining the global rules of the game points out promising avenues for future research, it simultaneously makes clear how little currently established, mostly managerial conceptual frameworks have to offer in making sense of these developments. It is argued that we need to expand the rather restricted perspectives that these frameworks provide, in order to explore new conceptual foundations that will not only enable us to travel the (...) confines of the different disciplines involved with the study of the changing role of business in shaping the global rules of the game, but that can also systematically connect normative and positive research questions at the conceptual level. Three directions for this search for new foundations are briefly explored. (shrink)

One of the core challenges presented by ascriptions of moral responsibility to corporations is to identify who or what is being held responsible. A significant source of controversy in attempts to answer this challenge is whether or not responsibility can fall on a ‘corporate entity’ distinct from the individuals that make it up. In this article I argue that both sides of this debate have incorrectly assumed that the possession of moral agency is a necessary condition for holding moral (...) responsibility. I go on to argue that it is sufficient for a corporate entity to be a ‘morally significant system’, that is a non-agential system created by moral agents, and I develop an account of such systems. I conclude by setting out the implications of this analysis for our practices of holding corporations morally responsible. (shrink)

The urgency of the problem of climate change calls upon us to investigate the climate duties of agents beyond the state. Individuals are the most salient candidate in this respect. In section I, I argue that the idea that individuals might have duties to reduce their emissions raises difficult issues about individual difference-making. The rest of the chapter, then, focuses on what I take to be the third most-salient duty-bearer: large for-profit corporations. These entities have largely been overlooked in (...) philosophical discussions of climate-related duties. In Section II, I consider two possible reasons for this neglect, and argue that neither are good reasons. In Section III, I give a positive case for weighty and demanding duties for corporations, to cut back their present and planned emissions and to offset their past emissions. In Section IV, I bring the discussion full circle: corporations’ duties always imply duties for corporations’ members, that is, for the individuals who constitute the corporation. Drawing on earlier work, I give an account of who corporations’ members are and how their duties are structured. In heavily-emitting corporations, members prominently include managers, shareholders, and rank-and-file employees. So a range of individuals are on the hook after all, because the corporations that they constitute bear duties. Additionally, even non-members may have duties to act upon corporations, from the outside, with a view to inducing corporate duty-fulfillment. (shrink)

Vice epistemology studies the qualities of individuals and collectives that undermine the creation, sharing, and storing of knowledge. There is no settled understanding of which epistemic vices exist at the collective level. Yet understanding which collective epistemic vices exist is important, both to facilitate research on the antecedents and effects of collective epistemic vice, and to advance philosophical discussions such as whether some collective epistemic vices are genuinely collective. I propose an empirical approach to identifying epistemic vices in corporations, (...) analyzing a large dataset of online employee reviews. The approach has parallels to the methodology for identifying the big-five personality traits. It surfaces epistemic vices that are attributed to corporations by its own members and reduces the number of vices to the minimum required to describe differences between corporations. This approach yields a new taxonomy of epistemic vices for corporations. While two vices identified have close correlates in the existing literature, four others have not been identified at all or only in aspects. Two of these vices are ‘genuinely’ collective in the sense that they can only be attributed to collectives. (shrink)

Moderate holists like French, Copp :369–388, 2007), Hess, Isaacs and List and Pettit argue that certain collectives qualify as moral agents in their own right, often pointing to the corporation as an example of a collective likely to qualify. A common objection is that corporations cannot qualify as moral agents because they lack free will. The concern is that corporations are effectively puppets, dancing on strings controlled by external forces. The article begins by briefly presenting a novel account (...) of corporate moral agency and then demonstrates that, on this account, qualifying corporations do possess free will. Such entities possess and act from their own “actional springs”, in Haji’s :292–308, 2006) phrase, and from their own reasons-responsive mechanisms. When they do so, they act freely and are morally responsible for what they do. (shrink)

The ethical dilemma of large-scale multinational corporations is presented. The list of complaints and issues is summarized. A case is made for the concept of multinationals being inherently beneficial in today's world of high technology and dependence on international trade. The difficulty is extreme power wielded by some groups. It is concluded that a philosophical ideal is for control on size and power as well as international rules to prevent abuses of power. The concern is that today the worthiness (...) of being relatively small is slowly but surely being eroded. (shrink)

The article deals with the question how transnational corporations can bear direct responsibility for human rights abuses they commit by analysing the deficiencies of the current international legal background with respect to human rights and transnational corporations, and the solutions offered by national and regional legal tools. By establishing that current international law is incapable of reducing or compensating for governance gaps, the case law analysis shows that the litigation system under the Alien Tort Claims Act in the (...) United States and ATCA-like litigation possibility in the European Union present a feasible alternative to international law in the field of human rights protection when abuses are committed by transnational corporations. (shrink)

The business and human rights movement shares several goals with the Benefit Corporation movement: corporations respecting human rights; maintaining a “wide aperture” so that all impacts of a company on people and communities are addressed; and creating rigorous standards of conduct and means of accountability. This paper argues that nonetheless the movements are traveling along parallel tracks and thus missing an opportunity for mutual learning that can improve their effectiveness. The BHR movement can look to B Corps for concrete (...) examples of viable companies that value human rights intrinsically and not just where there is a “business case” to do so. The B Impact Assessment, the B Corp certification tool, can better ensure that B Corps are in fact respecting human rights by adopting BHR standards. And both movements must give greater consideration to the potential contradiction between unlimited scaling—a key goal of B Corps—and the ability of large multinational corporations to respect human rights. (shrink)

Many corporations are large, powerful, and wealthy. There are massive shortfalls of global justice, with hundreds of millions of people in the world living below the threshold of extreme poverty, and billions more living not far above that threshold. Where injustice and needs shortfalls must be remediated, we often look towards agents’ capabilities to determine who ought to bear the costs of rectifying the situation. The combination of these three claims grounds what I call a ‘linkage-based’ account of why (...) corporations have demanding positive duties to the global poor. In this paper, I put forward a distinctive linkage-based account of corporations’ positive duties centred on the idea of dependence and the importance of meeting agents’ core needs. In addition to outlining and defending this account, I will show that we can utilise its basic conceptual components to make headway on questions that have received insufficient attention in the business ethics literature; specifically, we can say something substantive about the weighting of needy agents’ competing claims to assistance, and about the limits to the demands that can be lodged against corporations on the basis of others' unmet needs. Having integrated considerations of duties' grounding, their comparative weight, and the limits of their demandingness into a single account of corporate positive duty, I conclude by discussing a challenge to attributing to corporations duties owed to the worst-off amongst the global poor. (shrink)

Denunciations, disclosures and reporting: why do whistleblowing procedures create an ethical dilemma in French corporations? Since July 2006, the requirement that foreign multinationals listed on the New York Stock Exchange (NYSE) implement this practice has been met with stiff resistance in many French companies. French labor unions see this controversy as a clash between the French and Anglo-Saxon models of transparency. To understand the moral reticence of French companies towards whistleblowing, we investigate five distinct perspectives: legal, economic, historical, philosophical (...) and sociological. 1/ We first probe into the legal contradictions in French regulations and find in these paradoxes the symptoms of a national taboo. 2/We report on an economic survey, that gathers empirical data from 82 large French corporations, and analyzes different business sectors in France and the working population covered by a whistleblowing procedure. 3/ To elicit the etiology of this taboo, we return to the historical sources of the Dreyfus Affair and the Vichy regime, whose political traumas remain imprinted on the collective French memory. The linguistic confusion between the two French terms délation and dénonciation shows why whistleblowing is perceived in France more as an act of betrayal than of heroism. 4/ The philosophical roots of whistleblowing also shed light on the organizational behavior of French companies and the transparency they are struggling to promote. 5/Entangled in sociological ambiguities, we discuss why French companies see whistleblowing as a risk, not as a means to prevent risk. (shrink)

Social enterprises may take a variety of legal forms (limited liability companies, nonprofit entities, etc.). This paper focuses primarily upon one particular new form increasingly popular within the United States—the “Benefit Corporation.” I evaluate whether US Benefit Corporations are likely to realize as much social benefit as is frequently claimed. Part One of the paper describes the features of Benefit Corporations as they are constituted in many states. Part Two lays out the benefits extolled by supporters of this (...) US legal corporate form. Part Three challenges these claims and adduces some reasons for doubting whether Benefit Corporations will prove to be as socially useful as they claim to be. Part Four concludes with some suggestions for future lines of research into the nature of the firm and Benefit Corporations in particular. (shrink)

This paper consists of the text of a key-note address to the Vincentian Business Ethics Conference in Chicago in 2013. The content is substantially as delivered; some few ad hoc comments have been removed to preserve consistency of meaning in a printed text. The speech is presented by a senior executive of a number of FTSE listed firms. It offers his insights into the 2007 / 8 financial crisis and some retrospective interpretations of both ‘what’ happened and ‘how’ this changed (...) things. These insights, and some clear criticisms, are complemented with his suggestions for a way to reconstruct business in society less unsustainably. (shrink)

This article develops contractarian business ethics by applying social contract arguments to a specific question: What are the pre-legal (or moral) rights and responsibilities of corporations? The argument uses a hypothetical social contract to show the existence of for-profit corporations in democratic capitalist societies is consistent with Rawls’s fundamental principles of justice. Corporations ought to have recognised their rights to be autonomous, to pursue private purposes, and to engage in economic activities. Corporations have a responsibility to (...) respect the freedom and human rights of all people, and not to interfere with government programs that ensure people have the education and training they need to find and keep corporate employment and that provide a safety-net that prevents destitution. If corporations have any other rights and responsibilities, those rights and responsibilities need to be established by actual social contracts, probably in the form of legitimate democratic processes. (shrink)

At a time when nationalism is rising and support for democratic values is declining, this paper considers the role that businesses and corporations play in building and undermining social trust. It was published as part of the Future of the Corporation programme led by the British Academy.

With the expansion of multinational corporations, the alarming upsurge in widely publicized and notable corporate scandals involving MNCs in emerging markets has begun to draw both academic and managerial attention to look beyond home market practices to the pressing concern of CSR in emerging markets. Previous studies on CSR have focused primarily on Western markets, reserving limited discussions in addressing the issue of MNC attitudes and CSR practices in their emerging host markets abroad. Despite this incongruity in academic response (...) to CSR in emerging markets, managers of multinational companies continue to face mounting and most often conflicting pressures to weigh among multiple strategic CSR responses in emerging markets. Such a task is often further complicated by the complexity of varying business norms and standards, regulatory environments, and stakeholder demands for CSR across national boundaries. With such a challenge in mind, I attempt to examine the explanatory factors in leading MNCs, otherwise recognized for accountability and integrity in their home markets, to employ inconsistent or negligent practices under CSR pressure in Chinese emerging economy. Preliminary findings reveal that discrepancies exist in how MNCs perform in CSR in home countries versus in host countries. While MNCs do have much to improve, the institutional environment in the emerging market, including the legal framework and the ethical culture, also needs to be improved by the host country governments, the industry associations, and local firms. Meanwhile, media interest and journalists, NGOs, third party monitors, industry stakeholders as well as consumer advocacy groups can raise the visibility of MNC’s contradictory practices between their origin nations and countries with emerging economies and offer the pressures and incentives for MNCs to amend their ethical shortcomings. This article also suggests implications for both theory and practice. (shrink)