Thursday, February 6, 2020

Corporate Personhood

Unless a company takes the form of a sole proprietorship, it is impossible for a company to actually consist of a single person, and yet American law treats corporations as if they are, for legal purposes, individuals.  A business can be sued like a person, even if the company contains thousands of workers.  A business can also enjoy some of the legal rights bestowed upon human despite the fact that firms are often comprised of far more than a single person.

The legal treatment of a business as if it is an individual can be referred to as corporate personhood, the concept of which calls for clarification regarding what a company is in the first place.  A company is not a building, nor it its CEO or other executives alone.  A business is the collection of all employees and executives who have come together for the purpose of selling a product or service.  Without the human component, a building is nothing but a physical structure.

It follows that if people have moral obligations, so do businesses.  That a corporation is not a "natural person" does not mean that corporations have no obligations beyond enriching stockholders.  There is far more to business ethics than pleasing the public enough to positively affect profits and stock values!  A corporation may not be an individual in any sense other than a non-literal legal one, but it is nevertheless a group of people.

While not every aspect of corporate life is brimming with ethical ramifications, business is far from an amoral pursuit.  Just as human life is replete with moral considerations, corporate life is full of moral considerations that do not vanish when someone pretends like a business is separate from the people who sell goods or services or those who preside over the employees in question.  Corporate personhood does distinguish between the constructed "person" of a firm and the workers therein, yet this legal doctrine does not determine the actual nature of a business.

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