In our society, those entrusted with control of a corporation are bound by a fiduciary duty to the stockholders. This duty is paramount and cannot be ignored to suit the personal morals or conscience of those who exercise the control; any attempt to follow personal conscience over stockholder rights might potentially be regarded as a breach of fiduciary responsibility.
As a consequence of this rule, corporations often behave in a way that favors the survival of the company at the expense of individuals. (Although, as Greenspan alluded to in his shocked near-apology in October 2008, there are nuances even within attempts to do well by the company, since issues like short term vs. long term success can matter.) But no matter how you slice it, employees are necessarily way down on the list of concerns that a company has, because a company is worried about its own survival first, not about its employees’ survival. Corporations, by design, care primarily about one thing: themselves and their own survival; all other considerations are secondary.
It’s a curious and controversial aspect of law that corporations are also permitted to operate as legal persons This gives them some of the rights of human beings, sometimes called natural persons to distinguish themselves from—well,—other kinds of persons. For example, legal persons are able to own property, enter into contracts, and be involved as parties to lawsuits.
It seems like almost the stuff of science fiction, having people who are not really people. Humans often express a reasonable and well-placed concern about the concept of human-like entities moving in and among us, but without ethics, morals, or scruples. It’s the reason Isaac Asimov suggested his Three Laws of Robotics, a set of rules he felt should be incorporated (pardon the pun) at a low level in all robots, assuring their ethical participation in society.
But, unfortunately, corporations are just very clever robots (with full access to human intelligence but explicitly forbidding the application of human ethics). And there is no notion of Three Laws that applies to corporations.
Indeed, corporations seem in many way more analogous to human sociopaths, that is, persons exhibiting dissocial personality disorder. Perhaps we could borrow from the metaphor of legal persons and say they are legal sociopaths. Among humans, we generally fear and revile sociopathic behavior. But for some reason we tolerate it in corporations.
The WHO’s ICD-10 description notes that this includes amoral, antisocial, asocial, psychopathic, and sociopathic disorders, but not conduct disorders or emotionally unstable personality disorder.
Now I’m not medically trained, but it wouldn’t matter anyway. We’re talking metaphors, and the metaphor is going to be imperfect. I think the high level point is that this is the set of disorders that isn’t about being compulsively unable to control oneself, but is instead is about thoughtfully (some might even say rationally) planning and executing on actions that prevailing social norms would normally forbid.
The usual explanation one might expect from a corporation is that the so-called prohibition is in fact not legally forbidden, and therefore is allowed, perhaps even encouraged. (For more on this disturbing line of reasoning, see my essay, “Whatever Should Be, Should Be,” about the perils of the world “should” as a term of specificational requirement.) This fits in perfectly with the item “Gross and persistent attitude of irresponsibility and disregard for social norms, rules, and obligations.” After all, if you don’t believe that social norms are a rule or obligation, it’s easy to see how “incapacity to experience guilt and to profit from experience” can result.
I sometimes find myself wondering how the world would be different if there were a Three Laws safeguard built into corporations. Something like:
It sounds a bit harsh, and in fact I doubt all possible consequences of every action could be so thoroughly worked out. Even a modest start, replacing “human beings” with “its employees” would be a big improvement. That wouldn’t fix everything, but it would be a big step forward over what we have now. Among other things, that would mean that employees could freely contribute to the success of their company knowing that that company had their best interests at heart. In the modern world, that’s not the case. It’s not just that it’s unlikely. It’s that it’s not even allowed by law.
Of course, the more pragmatic among us might suggest the even simpler idea of removing the notion of “legal personhood” from the law in the first place.
Author's Note: Originally published February 2, 2009 at Open Salon, where I wrote under my own name, Kent Pitman.
Tags (from Open Salon): fiduciary duty, fiduciary responsibility, sociopath, three laws, three laws of robotics, three laws of corporations, corporation, liability, rights, responsibility, legal person, legal people, natural person, natural people, legal personhood, natural personhood