One of the presumptions that has informed much of the work on corporate accountability for human rights violations is based on a variation of the classic “profit maximization” framework – namely that, because corporations are primarily focused on maximizing shareholder interests, corporate motivations necessarily eschew any social goals that conflict with the profit maximization mantra. This idea was made most famous by Milton Friedman’s article written in the 1960’s (and which I’ve covered here). However, other scholars have taken that idea and formulated some ancillary thoughts regarding the consequences of the profit maximization model for corporate behavior. Among the most popular iteration of that idea was done in the documentary The Corporation (which I’ll blog about next week), however, even before then, others have taken the notion of profit maximization through its intellectual paces using other disciplines as their foundation. One such article is covered here below.
In their Harvard Business Review article from1982, Kenneth E. Goodpaster and John B. Mathews, Jr. ask a significant question which also serves as the title of the piece: Can a Corporation Have a Conscience? . The men let the cat out of the bag early when they say, “Organizational agents such as corporations should be no more and no less morally responsible (rational, self-interested, altruistic) than ordinary persons.”
The authors define the responsibility of persons in order to properly project those responsibilities onto corporations: (1) people are held accountable for the decisions that they make, (2) people have responsibilities to others based on their relationships with them, and (3) people have responsibilities to make decisions. While it may be too big of a leap for some to transfer these individual qualities that represent responsibility onto corporations, the authors say that the shift is a valuable one and it should be made. They say, “If a group can act like a person in some ways, then we can expect it to behave like a person in other ways.”
To conclude the article, the authors tackle some of the objections to the analogy as corporations as a morally responsible “person.” One such typical objection is that corporations are just artificial legal constructs and not actual persons so they should not be held responsible like individuals. The authors rebut that notion by saying that nobody is considering corporations persons in a literal sense. But, there are certain aspects of corporations that function like those of people as in decision-making or goal creation. With these types of activities, a sense of responsibility can and should attach. Another common objection to the analogy is that businesses are by their very nature bigger and more powerful than individuals and to unleash their power in a morally forceful way could lead to “moral imperialism.” So this argument basically says that these corporations could throw their power behind some unsavory forces. But, the authors say that while this is a serious concern, it is important to note that power is affective whether it is purposefully wielded or not. Action and inaction can both speak volumes. Moreover, the idea of imperialism should be more feared when moral reasoning is absent than when it is in use.
The authors make clear that whether corporations like it or not, they are a force to be reckoned with in our society. Like any entity with power, corporations should recognize their responsibilities to the society they service and serve. And, in that recognition, they should use a moral and ethical vocabulary to reach the best results possible. That, in its essence, would be a corporation successfully using its conscience.
Goodpaster and Matthew offer foundational work that is later developed by Professor Joel Bakan in “The Corporation” in which he describes corporations as psycopaths. Stay tuned next week to see my review of the movie.
