Corporate Judgment and Restraint

Peter French (1979) famously argued that corporations are the authors of their own conduct— and therefore agents—because their actions are the result of corporate internal decision making structures (CIDs), which “accomplish a subordination, and synthesis of the intentions and acts of various...

One way to interpret French’s insight is to note how CIDs preserve corporate-level intentions. A corporation is thought to have an intention in virtue of the processes prescribed by a CID (cf. Arnold 2006; Bratman 2014). And, in virtue of this intention, a corporation is thought to possess a sufficiently independent level of agency to warrant our ascriptions of responsibility. The problem, however, with this focus on corporate intentions is that intentions are a necessary but not sufficient quality of a morally responsible agent. Indeed, this was the ini­tial concern expressed by Thomas Donaldson in his original response to French:

[French’s] view assumes that anything which can behave intentionally is an agent, and that anything which is an agent is a moral agent. But some entities appear to behave intentionally which do not qualify as moral agents. A cat may behave intentionally when it crouches for a mouse. We know that it intends to catch the mouse, but we do not credit it with moral agency.... A computer behaves intentionally when it sorts through a list of names and rearranges them in alphabetical order, but we do not consider the computer to be a moral agent.. One seemingly needs more than the presence of intentions to deduce moral agency.

(Donaldson 1982: 30)

For Donaldson moral agents not only are intentional entities but also demonstrate a decision­making process that is of a moral nature.

This call for moral reasoning that frames corporate intentions is straightforward enough. The presence of moral considerations, as well as deliberate consideration of—and responsive­ness to—those considerations for proposed courses of action is part of what we count as an agent capable of morally responsible conduct. French’s later work acknowledges this basic point (1996, 2017).

A deeper examination of this expectation is borne out in Phillip Pettit’s recent defense of “incorporating” moral responsibility (2007). He maintains—evoking Donaldson’s call for responsiveness to moral considerations—that moral agency demands that the would-be agent can: (a) make an autonomous choice in situations where moral values are relevant; (b) exer­cise reflective judgment to compare and evaluate different moral values in those situations; and (c) is prepared to exercise restraint over what course of action to take in order to facilitate that judgment. Moral agency, in brief, expects that the agent is autonomous, capable of hol­istic judgment, and able to exercise restraint, all with respect to moral principles (List and Pettit 2011:153-156).³

The capacity for judgment and restraint are straightforwardly found within CIDs, such as corporate constitutions, shared behavioral norms, by-laws, board decisions and other day-to- day managerial processes. Kendy M. Hess (2014) has recently made the case that these elements make up a corporate “structure” that unifies corporate agents and allows a single point of view from which various commitments about fact and value guide a corporation’s action.

A similar story can be told for the capacity of restraint. Corporate structures provide the mechanisms through which corporate conduct is limited or prescribed. This may even be the case despite the fact that some individual members may not agree with those limitations or believe that the limitations are not forthcoming from the point of view prescribed by the structure. Again, as in the case of corporate judgment, restraint of the corporation arises out of shared structures that produce practical results above and beyond the beliefs, intentions and attitudes of individual members. Corporations restrain their own conduct on the basis of prac­tical results generated within corporate decision making structures.

Pettit and Hess understand the capacity for judgment and restraint to be guided by moral considerations. So the explanation as to how corporations can exercise judgment and self­restraint include the use, integration and application of moral principles within corporate deci­sion making structures. Corporate decision making structures stand above the decisions made by individual members of the corporation. They provide both direction and authorization for members to act on behalf of the corporation, reflecting the procedural outcomes of the “cor­porate charter and by-laws as interpreted and amended by the board of directors, corporate management, and market forces” (Hasnas 2017: 601).

The level of moral agency suggested by the capacities of judgment and self-control conveys the idea that corporations are entities that are capable of examining actions with respect to cer­tain moral commitments and then implementing policies that meet those commitments. The demands of morality have a disciplining function within corporate structures and corporations, and, in virtue of those structures and the guidance they provide individual members, are them­selves capable of engaging, with intention and deliberateness, activities consistent with the demands of morality.

The disciplining function of moral principles within corporate decision making structures is what allows for the political account of corporate moral responsibility sketched above. Corporations are social institutions that are capable of acting independent of mere external constraint. They can act with restraint and such restraint can be shaped against the background of moral concerns that are integrated into corporate decision making structures.

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