The Corporation as a Moral Person

Author(s): Peter A. French

Source: American Philosophical Quarterly, Vol. 16, No. 3 (Jul., 1979), pp. 207-215
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American Philosophical Quarterly
Volume 16, Number 3, July 1979

V. THE CORPORATION AS A MORAL PERSON

PETER A. FRENCH
I torically correct in citing the law as a primary
origin of the term "person." But he is incorrect in
one of his New York Times columns of not too maintaining that its legal usage somehow entails its
IN long ago Tom Wicker's ire was aroused by a Gulf metaphysical sense, agency; and whether or not
Oil Corporation advertisement that "pointed the either sense, but especially the metaphysical, is
finger of blame" for the energy crisis at all elements interdependent
on the moral sense, accountability,
of our society (and supposedly away from the oil is surely controversial. Regarding the
relationship
company). Wicker attacked Gulf Oil as the major, between
metaphysical and moral persons there are
if not the sole, perpetrator ofthat crisis and virtually two distinct schools of thought. According to one,
every other social ill, with the possible exception of to be a
metaphysical person is to be a moral one ; to
venereal disease. It does not matter whether Wicker understand what it is to be accountable one must
was serious or sarcastic in making his charges (I understand what it is to be an intelligent or a
suspect he was in deadly earnest). I am interested in rational agent and vice-versa; while
according
to
the sense of moral make the other, an is a but not
ascriptions responsibility being agent necessary
when their subjects
are
corporations.
I
hope
to pro? sufficient condition of being a moral person. Locke
vide the foundation of a theory that allows treatment holds the interdependence view with which I agree,
of corporations as members of the moral community, but he roots both moral and metaphysical persons in
of equal standing with the traditionally acknow? the juristic person, which is, I think, wrongheaded.
ledged residents: biological human beings, and The
preponderance of current
thinking tends to
hence treats some version of the
Wicker-type responsibility ascriptions necessary pre-condition view,
as
unexceptionable instances of a perfectly proper but it does have the virtue of treating the legal
sort without to them. In short, person as
having paraphrase something apart.
corporations can be full-fledged moral persons and It is of note that many contemporary moral
have whatever and duties as are, and economists both take a pre-condi?
privileges, rights philosophers
in the normal course of affairs, accorded to moral tion view of the between the meta?
relationship
persons. physical and moral person and also adopt a
particular view of the legal personhood of corpora?
tions that effectually excludes se
II corporations per
from the class of moral persons. Such
philosophers
It is important to distinguish three quite different and economists the least defensible of a
champion
notions of what constitutes that are number of possible of the juristic
personhood interpretations
entangled in our tradition : the moral of but their so
metaphysical, personhood corporations, doing
and legal concepts. The is clearly evi? allows them to the
entanglement systematically sidestep question
dent in Locke's account of personal He of whether can meet the conditions of
identity. corporations
writes that the term is "a forensic term,
"person" metaphysical personhood.3
appropriating actions and their merit ;and so belongs

only to intelligent agents, capable of law, and happi?

and He on to that
Ill
ness, misery."1 goes say by
John Rawls is, to some extent, guilty of fortifying
consciousness and memory are of
persons capable
extending themselves into the past and thereby be? what I hope to show is an indefensible interpretation
come "concerned and accountable."2 Locke is his of the legal concept and of thereby encouraging an
1
John Locke. An Essay Concerning Human Understanding (i960), Bk. II, Ch. XXVII.
2
Ibid.
3
For a particularly flagrant example see: Michael Jensen and William of the Firm: Managerial
Meckling, "Theory Behavior,
Agency Costs and Ownership Structure," Journal of Financial Economics, vol. 3 (1976), pp. 305-360. On p. 311 they write, "The
or firm is simply one form of serves as a nexus for . . ."
private corporation legal fiction which contracting relationships

207
 208 AMERICAN PHILOSOPHICAL QUARTERLY

anthropocentric bias that has led to the general retreated to the comfortable bulwarks of the anthro
belief that cannot be moral per? bias.
corporations just pocentric
sons. As iswell known, Rawls defends his two prin?
ciples of justice by the use of a thought experiment
IV
that incorporates the essential characteristics of what
he takes to be a pre-moral, though metaphysical Many I think, Rawls,
philosophers, including,
population and then "derives" the moral guidelines have rather uncritically relied upon what they
for social institutions that they would accept. The incorrectly perceive to be the most defensible
persons (or parties) in the "original position" are juristic treatment of collectivities such as
corpora?
described by Rawls as being mutually self-interested, tions as a paradigm for the treatment of corporations
rational, as similar wants, interests in their moral theories. The of corporate
having needs, concept
and and as under
capacities being, for all intents and pur? legal personhood any of its popular inter?
poses, in power that no one of them can I want to argue, useless for
equal (so pretations is, virtually
dominate the others). Their choice of the principles moral purposes.
of justice is, as Dennett has pointed out,4 a rather Following many writers on
jurisprudence,
a
dramatic rendering of one version of the compelling juristic person may be defined as any entity that is
(though I think unnecessarily complex) philo? a subject of a right. There are
good etymological
sophical thesis that only out of metaphysical persons grounds for such an inclusive neutral definition.
can moral ones evolve. The Latin "persona" originally referred to dramatis
But Rawlsis remarkably ambiguous (and admit? personae, and in Roman law the term was
adopted
tedly so) regarding who or what may qualify as a to refer to anything that could act on either side of a
metaphysical person. He admits into the category, legal dispute. [It was not until Boethius' definition
in one sentence, not human of a "Persona est naturae rationabilis individua
only biological beings person:
but "nations, provinces, business firms, churches, substantia (a person is the individual subsistence of a
teams, and so on,"5 then, because he does rational that traits were
perhaps nature)" metaphysical
not want to tackle the demonstration the ascribed to persons.] In effect, inRoman
of ration?
legal tradi?
ality, etc., of those institutions and or tion are of the law
organizations, persons creations, artifacts, itself,
because he is a captive of the traditional prejudice i.e., of the legislature that enacts the law, and are
in favor of biological persons, in the next sentence he not considered to have, or only have
incidentally,
withdraws entry. "There is, perhaps,
a certain existence of any kind outside of the legal sphere.
logical priority to the case of human individuals : it The law, on the Roman is systema?
interpretation,
may be to analyze the actions of so-called of the biological status of its subjects.
possible tically ignorant
artificial persons as constructions of the The Roman notion to is
logical applied corporations
actions of human . . ."6 known as the Fiction
persons "Perhaps" is, of popularly Theory. Hallis
course, a rather large hedge behind which to hide; characterizes that theory
as
maintaining that "the
but it is, I suppose, of some significance that in A personality of a corporate body is a pure fiction and
Theory of Justice when he is listing the nature of the owes its existence to a creative act of the state."8
parties in the he adds "c. Rawls' view of could how?
"original position" corporate persons not,
associations (states, churches, or other ever, be motivated adherence to the Fiction
corporate by
bodies)."7 He does not, unhappily, discuss this Theory for two reasons. The theory does not demand
entry on his list anywhere else in the book. Rawls a dichotomy between real and artificial persons. All
has hold, I think, of an important intuition : that juristic persons, on the are creations of the
theory,
some associations of human should be treated law. The does not view the law as
beings theory recognizing
as persons on his account of or verifying some pre-legally it
metaphysical capable existing persons;
becoming moral persons, in and of themselves. He argues that the law creates its own
subjects. Secondly,
has, however, shrunk from the task of exploring the the theory, in its pure form at least, does not
regard
of that intuition and has instead as composites. All
implications any juristic persons things which

4Daniel
Dennett, "Conditions of Personhood" in The Identities of Persons ed. by A. O. Rorty (Berkeley, 1976), pp. 175-196.
5
John Rawls, "Justice as Reciprocity," in John Stuart Mill, Utilitarianism, ed. by Samuel Gorovitz (Indianapolis, 1971), pp. 244-245.
6 Ibid.
7
John Rawls, A Theory of Justice (Cambridge, 1971), p. 146.
8 Frederick
Hallis, Corporate Personality (Oxford, 1930), p. xlii.
 THE CORPORATION AS A MORAL PERSON
20?j

are
legislatively created as
subjects of rights are non?
majority opinion of The Court of Appeals (5-1) was
reducible or, if you will, primitive individual legal that thecorporation
was an
entity created by statute

persons. (It is of some note that the Fiction Theory and hence was "a different person altogether from
is enshrined in English law in regard to corporate the subscribers to the memorandum or the share?
bodies by no less an authority than Sir Edward Coke holders on the register."11 Hallis
aptly summarizes
who wrote that
corporations "rest only in intend the judgment of the court when he writes that "The
ment and consideration of the Continental and Rubber was an
law."9) Tyre Co., Ltd.,
The Fiction Theory's major rival in American English company with a personality at law distinct
and the view that does seem to in? from the of its members and could
jurisprudence personalities
form Rawls' account iswhat I shall call "the Legal therefore sue in the English Courts as a British Sub?
Aggregate Theory of the Corporation." It holds ject."12 The House of Lords, however, supporting
that the names of corporate bodies are
only umbrel? the Aggregate Theory and no doubt motivated by
las that cover (but do not shield) certain biological the demands of the War, overturned the Court of
persons. The Aggregate Theory treats biological Appeals. Lord Buckley wrote "The artificial legal
status as
having legal priority and corporate exist? entity has no independent power of motion. It is
ence as a contrivance for purposes of moved the . . . He is German in
summary by corporator.
reference. (Generally, it may be worth mention, fact although British in form."13 This view has seen
Aggregate Theorists tend to ignore employees and many incarnations since on both sides of the Atlantic.
identify corporations with directors, executives and I take Rawls' burying of his intuition in the logical
stockholders. The model on which they stake their priority of human beings as a recent echoing of the
claim is no doubt that of the primitive partnership.) words of Lord Parker who in the Continental Tyre
I have shown elsewhere10 that to treat a
corporation
case wrote for the majority in the House of Lords :
as an for any is to fail to recog? "... the character in which the property is held and
aggregate purposes
nize the key logical differences between corporations the character in which the capacity to act is enjoyed
and mobs. The Aggregate Theory, then, despite the and acts are done are not in pari materia. The latter
fact that it has been quite popular in legislatures, character is a
quality of the company itself, and con?

courtrooms, and on streetcorners

simply ignores ditions its capacities and its acts and is attributable
socio-economic and historical facts of to human . .
key logical, only beings ."]14
corporate existence. [It might prove of some value In Germanic legal tradition resides the third
in clarifying the dispute between Fiction and major rival
interpretation of corporate juristic per?
Aggregate theorists to mention a rather famous case sonhood. Due primarily to the advocacy of Otto von
in the English law. (The case is cited by Hallis.) It is Gierke, the so-called Reality Theory recognizes
that of Continental Tyre and Rubber Co., Ltd. vs corporations to be pre-legal existing sociological
Daimler Co. Ltd. Very sketchily, the Continental persons. Underlying the theory is the view that law
Tyre company was incorporated in England and cannot create its
subjects, it only determines which
carried on its business there. Its business was the societal facts are in conformity with its requirements.

selling of tires made in Germany, and all of its At most, law endorses the
pre-legal existence of
directors were German in residence in Ger? for its own Gierke the
subjects persons purposes. regards
many, and all but one of its shares were held as an of certain social actions
by corporation offspring
German subjects. The case arose
during the First having then a defacto personality, which the law
World War, and it turned on the issue of whether only declares to be a juridical fact.15 The Reality
the company was an English subject by virtue of its Theory's primary virtue is that it does not ignore
being incorporated under the English law and the non-legal roots of the
corporation while it, as

independent of its directors and stockholders, and does the Fiction Theory, acknowledges the non
could hence bring suit in an English court against identity of the corporation and the aggregate of its
an English subject while a state of war existed. The directors, stockholders, executives and employees.
9 io Co. see
Rep. 253, Hallis, p. xlii.
10 and Blame,"
"Types of Collectivities The Personalist, vol. 56 (1975), pp. 160-169, and in the first chapter of my Foundations of
Corporate Responsibility (forthcoming).
11
"Continental Tyre and Rubber Co., Ltd. vs. Daimler Co., Ltd." ( 1915), K.B., p. 893.
12
Hallis, p. xlix.
13"Continental
Tyre and Rubber Co., Ltd. vs. Daimler Co., Ltd." (1915), K.B., p. 918.
14(iqi6), 2 A.C., p. 340.
15See in
particular Otto von Gierke, Die Genossenschoftstheorie (Berlin, 1887).
 210 AMERICAN PHILOSOPHICAL QUARTERLY

The primary difference between the Fiction and V

Theories, that one treats the
Reality corporate per? are
Two lessons however, learned from an
son as de as helpful
jure and the other defacto, however, turns
investigation of the legal personhood of corpora?
out to be of no real
importance in regard to the issue
tions: (i) biological existence is not essentially
of the moral of a Admit?
personhood corporation. associated with the concept of a person (only the
tedly the Reality Theory encapsulates a view at least fallacious Aggregate Theory depends upon reduc?
superficially more amenable to arguing for discrete
tion to biological
moral than does the Fiction referents) and (2) a paradigm for
corporate personhood the form of an inclusive neutral definition of a moral
Theory just because it does acknowledge de facto
"a subject of a right." I shall
but theorists on both sides will admit person is provided:
personhood, define a moral as the referent of an7 proper
that they are providing person
interpretations of only the
name or that can be a non-eliminatable
formula = the of description
"juristic person subject rights,"
subject of what I shall call (and presently discuss)
and as as we stick to no
long legal history, interpreta? a responsibility
tion ofthat need concern itself with meta?
formula ascription of the second type. The
non-eliminatable nature of the subject should be
physical personhood or agency. The de facto
stressed because and other moral
of the Reality is that of a responsibility
personhood Theory are neutral as and
predicates regards person person
sociological entity only, of which no claim is or need sum predication.17 Though we
be made or etc. One might say that The
regarding agency rationality Ox-Bow mob should be held responsible for the
could, without contradiction, hold the Reality
death of three men, a mob is an of what I
and the or moral example
Theory deny metaphysical person? have elsewhere an
called aggregate with
hood of corporations. What is needed is a Reality collectivity
no identity over and above that of the sum of the
Theory that identifies a defacto metaphysical person identities of its component and hence
not just a sociological entity. membership,
to use "The Ox-Bow mob" as the of such
all of these interpretations of cor? subject
Underlying is to make reference to each
ascriptions summary
porate legal personhood is a distinction, embedded
member of the mob. For that reason mobs do not
in the law itself, that renders them unhelpful for our
as or moral
qualify metaphysical persons.
purposes. Being a subject of rights is often contrasted
in the law with being an "administrator of rights."
VI
number of entities and associations can and
Any
have been the subjects of legal rights. Legislatures There are at least two significantly different types
have given rights to unborn human beings, they of responsibility ascriptions that should be dis?
have reserved rights for human after in usage the
beings long tinguished ordinary (not counting
their death, and in some recent cases
they have in? recommendation, "He is a
lauditory responsible
vested rights in generations of the future.16 Of course
lad.") The first-type pins responsibility on someone
such subjects of rights, though they are legal persons, or
something, the who-dun-it or what-dun-it sense.
cannot
dispose of their rights,
cannot administer Austin has pointed out that it is usually used when
them, because to administer a one must be an an event or action is thought the to be
right by speaker
agent, i.e., able to act in certain ways. It may be untoward. we are more interested in the
(Perhaps
an historical accident that most cases are failures rather than the successes that our
only legal punctuate
cases in which "the subject of right X" and "the lives.)
administrator of right X" are co-referential. It is The second-type of responsibility ascription,
nowhere required by law, under any of the three
parasitic upon the first, involves the notion of
above theories or elsewhere, that it be so. Yet, it is a is inter?
accountability. "Having responsibility"
possession of the attributes of an administrator of woven with the notion "Having a liability to
rights and not those of a subject of rights that are answer," and having such a liability or obligation
among the generally regarded conditions of moral seems to imply (as Anscombe has noted18) the
It is a fundamental mistake to existence of some sort of
personhood. regard authority relationship
the fact of juristic corporate personhood as having either between people or between and a deity
people
settled the question of the moral personhood of a people
or and in some weaker versions between

corporation
one way or the other. social norms. The kernel of insight that I find
16
And, of course, in earlier times animals have been given legal rights.
17See Gerald
Massey, "Tom, Dick, and Harry, and All The King's Men," American Philosophical Quarterly, vol. 13 ( 1976), pp. 89-108.
18G. E. M. "Modern Moral
Anscombe, Philosophy," Philosophy, vol. 33 (1958), pp. 1-19.
 THE CORPORATION AS A MORAL PERSON 211

intuitively compelling, is that for someone to legiti? it asserts it implies that the subject is accountable to
mately hold someone else
responsible for some event the speaker (in the case at hand) because of the
there must exist or have existed a responsibility subject's relationship to the speaker (who the speaker
relationship between them such that in regard to is or what the speaker is, a member of the "moral
the event in the latter was answerable to a for that The
question community," surrogate aggregate).
the former. In other words, "Xis
responsible for y"
primary focus of responsibility ascriptions of the
as a
second-type ascription,
is
properly
uttered by second type is on the subject's intentions rather
someone Z if X in respect to y is or was accountable than, not to the exclusion of, occasions.
though
to Z. Responsibility relationships are created in a Austin wrote: "In considering responsibility,
few
multitude of ways, e.g., contracts, are considered more than to
through promises, things important
by establish whether a man intended to do A, or whether
compacts, hirings, assignments, appointments,
agreeing
to enter a Rawlsian
original position,
etc. he did A intentionally."19 To be the subject of a
The right to hold responsible is often delegatable to responsibility ascription of the second type, to be a
third parties; though in the case of moral responsi? party in responsibility relationships, hence to be a
no occurs because no person is moral the must be at minimum, what
bility delegation person, subject
excluded from the relationship: moral
responsi? I shall call a Davidsonian agent.20 If corporations
bility relationships hold reciprocally and without are moral persons, they will be non-eliminatable

agreements among all moral persons. No Davidsonian agents.

prior
special arrangement needs to be established between
to hold someone
VIII
for anyone morally respon?
parties
sible for his acts or, what amounts to the same For a to be treated as a Davidsonian
thing, corporation
every person is a party to a relation? agent it must be the case that some that hap?
responsibility things
ship with all other persons as regards the doing or pen, some events, are describable in a way that

refraining from doing of certain acts: those that take makes certain sentences true, sentences that say that
that use moral notions. some of the a does were intended
descriptions things corporation
Because our interest is in the criteria of moral by the corporation itself. That is not accomplished
personhood
and not the content of morality we need if attributing intentions to a corporation is only a
not pursue this idea further. What I have maintained shorthand way of attributing intentions to the bio?
is that moral responsibility, although it is neither logical persons who comprise e.g. its board of
contractual nor is not a class but an directors. If that were to turn out to be the case then
optional, apart
extension of ordinary, garden-variety, responsi?
on metaphysical if not logical grounds there would
bility. What is needed in regard to the present sub? be no way to
distinguish between
corporations
and

ject then is an account of the requirements for entry mobs. I shall argue, however, that a Corporation's
into any responsibility relationship, and we have Alternai decision Structure (its CID Structure) is
already
seen that the notion of the juristic person the requisite redescription device that licenses the
does not a sufficient account. For of
provide example, predication corporate intentionality.
the deceased in a case cannot be held a causal notion, is an
probate Intentionality, though
in the relevant way anyone, even intensional one and so it does not mark out a class
responsible by
though the deceased is a juristic person, a subject of of actions or events. Attributions of intentionality in
to any event are with
rights. regard referentially opaque
respect to other of that event, or, in
descriptions
other the fact one an
VII words, that, given description,
action was intentional does not entail that on every
A responsibility ascription of the second type other description of the action itwas intentional. A
amounts to a
aspect of an event is
the assertion of conjunctive proposi? great deal depends upon what
tion, the first conjunct of which identifies the sub? described. We can say, "Hamlet
being correctly e.g.,
actions with or as the cause of an event kills the person in Gertrude's
ject's intentionally hiding
an untoward and the second room of Davidson's but Hamlet
(usually one) conjunct (one examples),
asserts that the action in was intended does not kill
question by intentionally Polonius," although
the subject or that the event was the direct result of "Polonius" and "the person hiding in Gertrude's
an intentional act of the subject. In addition to what room" are co-referential. The event may be properly
19 L.
J. Austin, "Three Ways of Spilling Ink" in Philosophical Papers (Oxford, 1970), p. 273.
20See for
example Donald Davidson, "Agency," in Agent, Action, and Reason, ed. by Binkley, Bronaugh, and Marras (Toronto, 1971).
 212 AMERICAN PHILOSOPHICAL QUARTERLY

described as "Hamlet killed Polonius" and also as to us here: (i) an organizational or responsibility
"Hamlet intentionally killed the person hiding in flow chart that delineates stations and levels within
Gertrude's room the but not as the structure and
(behind arras)," corporate power (2) corporate
"Hamlet intentionally killed Polonius," for that was decision recognition rule(s) (usually embedded in
not Hamlet's intention. (He, in fact, thought he was something called "corporation policy"). The CID
killing the King.) The referential opacity of inten Structure is the personnel organization for the

tionality attributions, I shall presently argue, is exercise of the corporation's power with respect to

congenial to the driving of a wedge between the its ventures, and as such its primary function is to
of certain events as individual inten? draw from various levels of the
descriptions experience corpora?
tional actions and as intentional actions. tion into a decision-making and ratification
corporate process.
Certain events, that is, actions, are describable as When operative and properly activated, the CID
simply the bodily movements of human beings and Structure accomplishes
a subordination and syn?
sometimes those same events are redescribable in thesis of the intentions and acts of various biological
terms of their upshots, as bringing about something, persons into a
corporate decision. When viewed in
another as the CID Struc?
e.g., (from Austin21) feeding penguins by throwing way, already suggested,
them is the most common way we ture licenses the transformation of
peanuts ("by" descriptive
connect different of the same events, seen under another as the acts of bio?
descriptions event22), aspect
and sometimes those events can be redescribed as who various stations
logical persons (those occupy
the effects of some cause; then are on the to acts
prior they organizational chart), corporate by
described as done for reasons, done in order to the corporate character of those events. A
bring exposing
about e.g., the penguins CID Structure acts of bio?
something, feeding peanuts functioning incorporates
in order to kill them. Usually what we single out as logical persons. For illustrative purposes, suppose
we
that cause is some desire or felt need combined that an event E has at least two that
prior imagine aspects,
with the belief that the object of the desire will be is, can be described in two non-identical ways. One
achieved by the action undertaken. (This, I think, of those aspects is "Executive Z's doing y" and one is
is what Aristotle meant when he maintained that "Corporation
C's doing 2." The corporate act and

acting requires desire.) Saying "someone (X) did y the individual act may have different properties;
intentionally" is to describe an event (y) as the up? indeed they have different causal ancestors though
shot of X's having had a reason for doing it which they
are
causally inseparable. (The causal insepara?
was the cause of his doing it. bility of these acts I hope to show is a product of the
It is obvious that a corporation's doing something CID Structure, X\ doing y is not the cause of C's
involves or includes human and z nor is C's z the cause of X\ y
beings doing things doing doing doing
that the human beings who occupy various positions although ifX\ doing y causes event F then C's doing
in a corporation can be described as z causes F and vice versa.)
usually having
reasons for their behavior. In virtue of those descrip? Although I doubt he is aware of the metaphysical
tions they may be properly held responsible for their reading that can be given
to this process, J. K.

behavior, ceteris What needs to be shown is Galbraith rather captures what I have in
paribus. neatly
that there is sense in saying that corporations and mind when he writes in his recent popular book on
not
just the people who work in them, have reasons the history of economics: "From [the] interpersonal
for doing what they do. Typically, we will be told exercise of power, the interaction ... of the parti?
that it is the or the managers, etc., that comes the of the
directors, cipants, personality corporation."23
really have the corporate
reasons and desires, etc., I take Galbraith here to be quite literally correct,
and that although corporate actions may not be but it is important to spell out how a CID Structure
reducible without remainder, corporate intentions works this "miracle."
are reducible to human intentions. In in recent years we have grown
always philosophy
accustomed to the use of games as models for under?

standing institutional behavior. We all have some

IX
of how rules in games make certain
understanding
Every corporation
has an internal decision struc?
descriptions of events possible that would not be so
ture. CID Structures have two elements of interest if those rules were non-existent. The CID Structure

21
Austin, p. 275.
22 See and Deserving
Joel Feinberg, Doing (Princeton, 1970), p. i34f
23
John Kenneth Galbraith, The Age of Uncertainty (Boston, 1971), p. 261.
 THE CORPORATION AS A MORAL PERSON 213

of a corporation is a kind of constitutive rule (or X

rules) analogous to the game rules with which we for illustrative we activate a
Suppose, purposes,
are familiar. The chart of a
organization corporation CID Structure in a corporation, Wicker's favorite,
distinguishes "players" and clarifies their rank and the Gulf Oil Corporation. Imagine that three
the interwoven lines of responsibility within the
executives X, Y and Z have the task of deciding
An chart tells us, for
corporation. organizational whether or not Gulf Oil will join a world uranium
example, that anyone holding the title "Executive cartel. X, Y and Z have before them an Everest of
Vice President for Finance Administration" stands
papers that have been prepared by lower echelon
in a certain relationship to anyone holding the title
executives. Some of the papers will be purely factual
"Director of Internal Audit" and to anyone holding some will be some will
reports, contingency plans,
the title etc. In effect it expresses, or
"Treasurer," be formulations of positions developed by various
maps, the interdependent and dependent relation? some will outline financial considera?
departments,
line and staff, that are involved in deter?
ships, tions, some will be legal opinions and so on. In so
minations of decisions and actions. The
corporate far as these will all have been processed through
chart provides what might be called
organizational Gulf's CID Structure system, the personal reasons,
the grammar of corporate decision-making. What I if any, individual executives may have had when
shall call internal recognition rules provide its logic. their and recommendations in a
writing reports
By "recognition rule(s)" I mean what Hart, in
specific way will have been diluted by the subordin?
another calls "conclusive affirmative indi?
context, ation of individual inputs to peer group input even
cation"24 that a decision on an act has been made or
before X, Y and Z review the matter. X, Y and Z
for reasons. rules a
performed corporate Recognition take a vote. Their of vote is authorized
taking
are of two sorts. Partially embedded in the organiza?
procedure in the Gulf CID Structure, which is to
tional chart are :we see that
procedural recognitors that under these circumstances the vote of X, Y
say
decisions are to be reached at certain as the
collectively and Z can be redescribed making
corporation's
levels and that they are to be ratified at higher levels a decision: that is, the event "XYZ voting" may be
(or at inner circles, if one prefers that Galbraithean redescribed to expose
an
aspect otherwise unre
model). A corporate decision is recognized intern? from its other aspects
vealed, that is quite different
ally, however, not only by the procedure of its X's in the affirmative.
e.g., from voting Redescrip
making, but by the policy it instantiates. Hence every tive of a procedurally of
exposure corporate aspect
creates an to be confused a
corporation image (not an event, however, is not to be confused with
with its public image) or a general policy, what G. C. of an event that makes true a sentence
description
Buzby of the Chilton Company has called the "basic that says that the corporation did something inten?
belief of the corporation,"25 that must inform its But the CID as
tionally. Structure, already sug?
decisions for them to be properly described as being also provides the grounds in its other
gested, type
those of that "The moment is an
corporation. policy of for such attribution of corporate
recognitor
or violated, it is no longer the policy of act is
side-stepped when the corporate
intentionality. Simply,
that company."26 an instantiation or an
consistent with, implementa?
Peter Drucker has seen the of the
importance tion of established corporate policy, then it is proper
basic policy recognitors in the CID Structure to describe it as having been done for corporate
(though he treats matters rather differently from
reasons, as
having been caused by
a
corporate
the way I am Drucker writes:
a corporate
recommending.) desire coupled with belief and so, in
Because the corporation is an institution it must have a other words, as intentional.
corporate
basic For it must subordinate individual am? An event may, under one of its be
policy. aspects,
bitions and decisions to the needs of the corporation's described as the conjunctive act "X did a (or as X
a a (or as Y intentionally
welfare and survival. That means that it must have did e Y did
intentionally a)
set of principles and a rule of conduct which limit and did a) s Z did a (or as Zintentionally did a)" (where
behavior . . .27
direct individual actions and a = voted in the affirmative on the question of Gulf

24H. L. A.
Hart, The Concept of Law (Oxford, 1961), Ch. VI.
25G. C.
Buzby, "Policies?A Guide toWhat A Company Stands For," Management Record, vol. 24 (1962), p. 5fr.
26 Ibid.
27 Peter
Drucker, Concept of Corporation (New York, 1964/1972), pp. 36-37.
 AMERICAN PHILOSOPHICAL QUARTERLY
214

Oil the cartel). Given the Gulf CID Struc? It will be objected that a corporation's policies
joining
formulated in this instance as the reflect the current of its directors. But
ture, conjunction only goals
of rules: when the occupants of positions A, B and C that is certainly not logically necessary nor is it in
on the chart vote to practice
true for most large corporations. Usually,
organizational unanimously
do something and if doing that something is con? of course, the original incorporators
will have

sistent with, an instantiation or an

implementation organized to further their individual interests and/or
of general corporate policy and ceteris paribus, then tomeet goals which they shared. But even in infancy
the corporation has decided to do it for corporate the melding of disparate interests and purposes gives
reasons, the event is redescribable as "the Gulf Oil rise to a corporate long range point of view that is

did j for corporate reasons/." (where distinct from the intents and purposes of the collec?
Corporation
j is "decided to join the cartel" and/is any reason tion of incorporators viewed individually. Also, cor?
as men?
(desire + belief) consistent with basic policy of Gulf porate basic purposes and policies, already
Oil, e.g., increasing profits) or simply as "Gulf Oil tioned, tend to be relatively stable when compared
intentionally did j." This is a rather to those of individuals and not couched in the kind
Corporation
technical way of saying that in these circumstances of language that would be appropriate to individual
as histories
the executives voting is, given its CID Structure, purposes. Furthermore, of corporations
also the corporation deciding to do something, and will show, when policies are amended or altered it is
that of the personal reasons the executives issues that are involved.
regardless usually only peripheral
have for voting as they do and even if their reasons Radical alteration constitutes a new
policy corpora?
are inconsistent with established corporate policy tion, a point that is captured in the incorporation
or even if one of them has no reason at all for voting laws of such states as Delaware. which
("Any power
as he does, the still has reasons for is not enumerated in the charter and the general law
corporation
joining the cartel ; that is, joining is consistent with or which cannot be inferred from these two sources

the inviolate as encrusted is ultra vires of the Obviously under?

corporate general policies corporation.")
in the of previous corporate actions and lying the objection is an uneasiness about the fact
precedent
its statements of purpose as recorded in its certi? that corporate intent is dependent upon policy and
ficate of incorporation, annual reports,
etc. The purpose that is but an artifact of the socio-psychology
only method of achieving its desires or of a group of biological persons. Corporate intent
corporation's
is the activation of the personnel who seems somehow to be a tarnished off?
goals occupy illegitimate
its various positions. However, if X voted affirma? spring of human intent. But this objection is another
for reasons of personal monetary form of the anthropocentric bias. By concentrating
tively purely gain
(suppose he had been bribed to do so) that does not on
possible descriptions of events and by acknow?
alter the fact that the corporate
reason for joining ledging only that the possibility of describing some?
the cartel was to minimize and hence as an whether or not it
competition thing agent depends upon
dividends to its shareholders. can be properly described as having done something
pay higher Corpora?
tions have reasons because have interests in of some of an for a
they (the description aspect event)

doing those things that are likely to result in realiza? reason, we avoid the temptation
to look for exten

tion of their established sional criteria that would necessitate reduction to

corporate goals regardless
of the transient self-interest of directors, managers, human referents.

etc. If there is a difference between corporate goals

The CID Structure licenses redescriptions of
and desires and those of human it is probably events as and attributions of
beings corporate corporate
that the corporate
ones are relatively stable and not intentionality while it does not obscure the private
wide but that is only because acts of executives, directors etc. X voted
very ranging, corpora? Although
tions can do fewer things than human to support the joining of the cartel because he was
relatively
confined in action predominately to a bribed to do so, X did not join the cartel, Gulf Oil
beings, being
limited socio-economic The attribution of the cartel. we
sphere. Corporation joined Consequently,

corporate intentionality is opaque with respect to may say that X did something for which he should
other possible of the event in question. be held morally responsible, yet whether or not
descriptions
It in a interest that its Gulf Oil Corporation should be held morally
is, of course, corporation's
component membership view the corporate pur? responsible for joining the cartel is a question that
as instrumental in the achievement of their turns on issues that may be unrelated to X9s
poses having
own reward is the most common a bribe.
goals. (Financial accepted
way this is achieved.) Of course Gulf Oil Corporation cannot join the
 THE CORPORATION AS A MORAL PERSON
215

cartel unless Zor somebody who occupies position A Structure licensed redescription of events as cor?
on the organizational chart votes in the affirmative. porate intentional. That
may still appear to be
What that shows, however, is that
corporations
are
downright mysterious, although I do not think it is,
collectivities.That should not, however, rule out the for human agency as I have suggested, resides in the
possibility of their having metaphysical status, as possibility of description as well.
being Davidsonian agents, and being thereby full Although further elaboration is needed, I hope I
fledged moral persons. have said enough tomake plausible the view that we
This much seems to me clear: we can describe have reasons to the non
good acknowledge
many events in terms of certain movements eliminatable of I have main?
physical agency corporations.
of human and we also can sometimes describe tained that Davidsonian is a necessary and
beings agency
those events as done for reasons
by those human be? sufficient condition of moral personhood. I cannot
ings, but further we can sometimes describe those further argue that position here (I have done so
events as
corporate and still further as done for cor? elsewhere). On the basis of the foregoing analysis,
porate reasons that are qualitatively different from however, I think that grounds have been provided
whatever personal reasons, if any, component
mem? for holding corporations per se to account for what
bers may have for doing what they do. they do, for treating them as metaphysical persons
Corporate agency resides in the possibility of CID qua moral persons.28

University ofMinnesota Received May 16, 1978

28This
paper owes much to discussions and comments made by J. L. Mackie, Donald Davidson and Howard K. Wettstein. An
earlier version was read at a conference on "Ethics and Economics" at the University of Delaware. I also acknowledge the funding
of the University of Minnesota Graduate School that supports the project of which this is a part.