Are Corporations Moral Agents?

Joshua Shepherd

Misbehaving corporations are in the news again. In the New York Times, Jack Ewing and Graham Bowley provide an interesting look into the ‘corporate culture’ behind Volkswagen’s emissions-cheating scandal. As Ewing and Bowley note, Volkswagen has blamed “a small group of engineers.” But as their reporting suggests, any anatomy of blame in the Volkswagen case should consider a wide range of social influences – for example, Volkswagen’s institutionalized commitment to aggression, and more local factors such as fear of those in positions of power on engineering teams.

But who is really at fault? It is natural to think that some individuals are responsible, at least in part. Are any individuals responsible in whole? Or is it possible that the corporation – Volkswagen itself – bears some of the responsibility? This kind of idea is something a number of philosophers have recently suggested. These philosophers argue that above the level of individual agency, there is such a thing as group agency. Groups (like Volkswagen) can be constituted by individuals (and also by historical and socio-structural features). Groups can intend to act – even when no member of the group has a similar intention – and act intentionally. Two philosophers (Björnsson and Hess forthcoming) have even argued that corporations are full moral agents, capable of expressing emotions like guilt, and open to the same kinds of blaming and praising attitudes we typically direct at individuals.

I’m not sure whether that is right. Corporations may be less like full moral agents, and more like extremely dangerous psychopaths – capable of manipulating their own responses to achieve the ends they truly value (i.e., maintaining profit margins). Or, corporations may be capable of a kind of agency, but one very unlike our own – one that is masked by thinking of them by analogy with human agents. It is unclear whether all the features associated with human agency are appropriately applied to the issue of corporate agency.

The notion of group agency raises important and interesting issues not only for the metaphysics of agency and for the social science of group behavior, but for punishment theory as well. What ought to be done to Volkswagen? Our answer will depend in part on whether we think that Volkswagen (as opposed to some of its employees) is guilty, and on what it means to even say that. When an individual commits a heinous crime, we want to know what was going on in their minds. What was the thought process that led to the crime? What kind of motivational structure does this criminal have? Are they corrigible, or are they likely to reoffend?

Suppose Volkswagen the group agent is guilty for an intentional action that violates the law. We might ask similar questions, posed this time at the group level. What kinds of processes are responsible for the group mental states (desires? intentions?) that caused and sustained the guilty deed? What kind of motivational make-up led the group agent to desire or intend such things? Are structural features of Volkswagen – its institutionalized aggression, the values it officially espouses, or whatever – drivers of its poor behavior? And if so, can we conceive of a kind of punishment that effectively targets these features – can we conceive of a punishment that effectively rehabilitates Volkswagen, the recalcitrant group agent?

 

If individual agents consistently misbehave thanks to some structural features of their environment – the presence of alcohol, for example – it seems wise to intervene on the environment, making it more difficult for those agents to get alcohol. Insofar as it is possible, we might also intervene on an agent’s motivational and cognitive makeup, via therapy for example. Might something similar apply to group agents? If some corporation is found to violate the law in part because an institutional commitment to defeating competitors always outweighs legal (and moral) duties to consider environmental impacts of corporate actions, we might be morally justified in forcing the corporation to explicitly consider environmental impacts as a part of its deliberative structure. One way to do this would be to install an ethicist (or an ethics board) with power to review corporate deliberations and decisions, as well as to periodically assess ‘corporate culture.’ But considering any novel punishment strategy is bound to raise additional questions. Would such an intervention really be effective, or would it damage the ability of corporations to succeed in the market? Would considering such rehabilitative punishments or penalties violate any rights associated with the corporation or its members? The answers to these questions seem to require a more sophisticated understanding of group behavior and group action than the one currently driving policy related to the regulation and punishment of corporations.

Björnsson, G. and Hess, K. forthcoming. Corporate crocodile tears? On the reactive attitudes of corporations. Philosophy and Phenomenological Research.

 

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2 Responses to Are Corporations Moral Agents?

  • Paul Treanor says:

    It is not necessary for corporations to be exactly equivalent to humans, in order to formulate norms for their behaviour, and a policy to address it. In fact, the behaviour of corporations is generally more accessible and transparent than that of an individual. Large corporations openly state their general purpose (“car manufacturer”), and their corporate values and goals. Their recruitment policy/advertising discloses the attitudes they expect from employees. True, that is less obvious in small firms, but they don’t generate major misbehaviour either.

    In most cases, a large firm’s corporate values and policies will make it clear that ‘punishment’ of the corporation is neither appropriate nor effective. It is pointless in the same sense as punishing addicts for their addiction. The entrepreneurial corporation has inherent qualities, and in most cases the punishment for its misbehaviour would conflict with internalised and inherent values and goals. That includes ‘succeeding in the market’, by definition the goal of an entrepreneur.

    The short answer to the complex issue is that corporations cannot be effectively told what to do, they can only be restructured, in effect ceasing to be a corporation in the entrepreneurial sense. ‘Rehabilitation’ is therefore not an appropriate analogy, it would be more like a death penalty.

  • hypnos says:

    A company (just as any large organization) needs an internal hierarchical structure and effective processes and incentives for decision making and also monitoring & control. Otherwise, it is not able to function consistently as a single entity. It makes no sense to have published goals and corporate values if one does not have the means to achieve them.

    For example, every company needs to ensure that no single “rogue employee” can cause significant harm by making bad decisions that are not corrected at some point by imposing appropriate checks and balances. So, if a “small group of engineers” is able to make bad decisions with respect to a core product and thus to endanger the company as a whole, changes need to be made to the structures, incentives and processes within the corporation. If an organisation is not able or willing to make these changes, it should be possible to apply external pressure to it.

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