Corporate Autonomy
The capacities for judgment and restraint imply that corporations possess reasons for their decisions and actions. As Pettit notes, implicitly acknowledging Donaldson’s original objection to French, corporate judgment and self-restraint are “reason-sensitive” in that judgments and acts of self-restraint arise within the justifications found within corporate decision making structures (Pettit 2007: 188).
These structure-derived reasons exist independently of whatever (related) reasons individual members may have to endorse the actions undertaken by the corporation.This exposes an assumption about the nature of reasons; in particular, if we presume that corporations lack minds, it suggests that reasons may not be mental states but, rather, states of affairs. This is a noteworthy result, but one that will not occupy our attention at this moment. But the idea that corporations possess and act upon reasons (whatever the metaphysics involved turn out to be) moves us closer to an examination of Pettit’s first criterion for corporate responsibility, namely that corporations are autonomous.
To say that corporations have autonomy, for Pettit, means that their reasons for action are theirs independently. Their reasons are theirs to be identified, had and acted upon.
Autonomy is intuitively guaranteed by the fact that on one or more issues the judgment of the group will have to be functionally independent of the corresponding member judgments, so that its intentional attitudes as a whole are most saliently unified by being, precisely, the attitudes of the group.
So, using the examples from above, if Volkswagen’s corporate decision making structures produced a decision to initiate a compensation program for its defrauded customers, or if BP’s board and management decided to work with local communities to formulate plans to restore inland wetlands harmed by its operations in the Gulf of Mexico, there are reasons that those corporations have to respond in the manner that they do.
Pettit argues that if we can understand a corporation’s reasons as its own reasons, then it is reasonable to infer that the corporation is acting autonomously.The most natural way to argue against the possibility of there being corporate reasons for action is to give an account of how what seem to be the independent reasons held by a corporation are actually reducible to a function of reasons held by its individual members. This is exactly the move that Pettit and others, including Hess, try to anticipate. Hess argues that there can be “discontinuity between the commitments that exist at the collective, corporate level and the commitments that exist at the individual, member level” (Hess 2014: 241—242). This divergence can be illustrated in a variety of cases. Explicit decisions that result from corporate structures (say those decisions made by an executive leadership team) may not reflect the judgments of individual members. Corporate decisions also result from “distributed” decision making where otherwise “piecemeal” decisions of individual members set in motion collective action which, while becoming accepted within the overall decision making structures of the corporation, do not reflect the reasoned commitments of individual members.
[Distributed decision-making] is a bit like assembling a car, with each member contributing one fact or decision and then passing the project on to the next without any member being in a position to see the on-going collective actions that the corporate agent will reliably enact as a result of their individual choices.
(Hess 2013: 325)
Hess goes on to explain that corporate policy can be built up from these distributed decisions over time. This creates circumstances where the commitments expressed through corporate action diverge from the commitments of its individual members.
The independence of corporate decisions, thus, is conceivable because there are situations where the executive and distributed nature of corporate action escapes scrutiny or endorsement from individual members.
These sorts of discontinuous cases illustrate what Pettit refers to as “discursive dilemmas” that show how a corporate decision cannot be understood as a “majoritarian” function of its members’ attitudes or intentions (Pettit 2007: 181; Pettit 2003). David Copp agrees, noting that corporate decision making structures provide enough resources to establish a perspective from which the corporation itself can be described as a “rational unity”:[Corporations] can face situations to which its members can respond by “collectivizing reason”—by adopting a decision procedure that forces the [corporation] to achieve a kind of rational coherence among the resulting decisions and judgments. Having done this, a [corporation] is an “integrated collectivity” and an “intentional subject” in its own right, capable of making decisions that its members would not support, capable of achieving a rational unity in its beliefs, intentions, and actions, and open to a kind of rational criticism if it fails in a relevant way.
(Copp 2006: 194)
Hess takes this to mean that a corporation is not just a “very complicated puppet” but is an independent agent in its own right with its own beliefs, desires, commitments and, seemingly, any other “agential moral property” that we would normally attribute to individual agents (cf. Copp 2007: 369). And “having their own [reasoned] commitments and their own actions, corporate entities are agents with their own obligations and their own responsibility” (Hess 2014:244-245).
Corporate autonomy on this line is thought to be established through the irreducibility of practical reasons, which can only be attributed to the corporation. But is this sufficient? Is the autonomy of an intentional actor established simply by the presence of reasons that only it possesses? Are there other dimensions to autonomy beyond the “rational unity” that corporate decision making structures provide?
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