Can a Corporation Have a Conscience?


In Can a Corporation Have a Conscience?, Kenneth E. Goodpaster and John B. Mathews Jr argue that our concepts of individual morality should be applied to corporations. They begin by defining morality as respect and logical thought, before proposing the projection of such moral values onto corporations. They systematically attempt to prove that corporations are analogous to individuals, and that moral values, although often considered alien in the corporate world, are just as valid a projection as economic values and goals. Their exploration of the issue delves into the current trains of thought regarding interference in corporate business, as well as several common objections to the concept of moral corporations.

Study Notes

Can a corporation act morally, or have a conscience?

Oppostion: no, only people are responsible for the well-being of those around them. Corporations are organizations that exist in set systems- they are economic, not moral.

Philosopher John Ladd says that we can't expect corporations to be "honest", or "considerate," or to "have any kind of moral integrity."

Goodpaster and Mathews disagree. They argue that corporations can and should have a conscience, and that an analogy between individual moral responsibility and a corporations' moral responsibility can be made.

Individual moral responsibility can be defined in 3 parts:
  1. blame/accountability (who is answerable in a situation?).
  2. rules (what are the social expectations placed on an individual?).
  3. judgment (can an individual make reliable decisions?).

Problem: defining morality is tough, but a set of guidelines is at least helpful.

Philosopher William K. Frankena says that morality has two main characteristics:
  1. rationality (logical thought).
  2. respect (consideration of others).

If both are present = peoples' opinions are valued.

This doesn't mean that everyone needs to agree on a definition of morality or on a solution for every ethical situation, it's simply a solid framework for discussion.

Applying this to corporations:
  • Question: Can we apply morality to an organization that isn't a person but is made up of people?
  • Legally a corporation = a unit. To have unity, a group must be acting on a system or a set of rules.
  • Therefore, questions of morality can be applied to that system or set of rules. Is the system logically planned? Does it take the well-being of others into account?
  • Example: a corporation that monitors its production regarding environmental effects and human health concerns is displaying rational thought and consideration for others = morality, just like an individual.
  • A corporation is an entity in itself.
  • Some corporations include systems that allow for what would be considered displays of self-control, integrity, and conscientiousness in a person.
  • There are stages of development in a corporation's character, just like in a person.
Should we REQUIRE corporations to act morally?

Two arguments against:

  1. Invisible hand: just let the free market and competitive nature of business run their course. Only requirement = follow the law.
  2. Government hand: economy, politics, and the law will take care of corporations to ensure that they act for the common good.

Similarities between these two: they both essentially reject the application of morality, and neither trust leadership enough to allow them to impose non-economic values on corporations. Both view the hand of management as economically irresponsible.

  • Corporations are built by individuals that are morally responsible, however, ethical dilemmas may require different types of responsible behavior.
  • Laws aren't sufficient for governing the actions of corporations- morality is required.
  • The projection of individual morality on corporations is possible and positive.
Is a Corporation a Morally Responsible Person? 9 Objections and Answers:
  1. A corporation is an artificial legal construction...
    • Its systems are created by people. We project goals and economic values onto corporations- why not moral values?
  2. Making $ is the sole purpose of corporations...
    • Morality and making $ can happen at the same time.
  3. Corporate executives are not elected social guardians...
    • Private business is not free of moral responsibility.
  4. Corporate management is responsible for making shareholders $...
    • Investors don't just want money- they also want social responsibility.
    • Corporations also have a relationship with the public.
    • Legal restraints already exists.
  5. Corporations are very powerful = huge moral abuse (such as backing the KKK)...
    • Disengaging from social responsibilities is already a moral choice.
  6. The concept of individual morality is too vague to project onto an organization...
    • Moral agreement is a process: rationality and respect are a useable framework.
  7. Morality and ethics are up to individuals anyway...
    • Yes, people in corporations make decisions.
    • No, intelligent people don't make an intelligent organization. Corporate systems need guidelines.
  8. Is the idea of corporate moral responsibility supposed to replace existing laws and basic market economics?
    • No, morality just adds a level.
  9. Consumer/customer relations already ensure that corporations take others' interests into account...
    • This concept leads to corporations treating people as a means to an end, not as innately valuable.