Thank you to Lyman and David for getting the ball rolling today, and to Gordon and The Conglomerate for graciously hosting this on-line symposium.
In response to David's post, I offer the following (David's initial four questions are reprinted in italics):
1) Is a Christian perspective on corporate law one of many possible true perspectives, or is it, in the end, the only way to ground a theory of corporations and corporate regulation? Similarly, is there likely to be a single Christian perspective?
This could be read (as, perhaps it was intended) as a profoundly theological question, touching upon issues that go to the heart of religion, and Christianity, in general. Is, for example, the Christian view of mankind, the world, and salvation, simply one of many possible true perspectives, or is it THE correct understanding of mankind, the world, and salvation? Anyone subscribing to the former approach would, I imagine, a fortiori, consider a Christian perspective on corporate law as simply one of many possible true perspectives.
But for those wedded to the latter approach, I don't think the answer is as clear. The question turns on, it would seem, the nature of corporate law. For, just as Fiorella LaGuardia famously observed that "There is No Democratic or Republican Way to Pick Up Garbage," perhaps corporate law is, at base, a mere exercise in pragmatism - and not rooted in the loftier principles that religion and Christianity are concerned with.
2) How does one construct a Christian theory of corporate law (e.g., Do you start with relevant passages of Scripture? Do you start with general underlying principles?)
I'd suggest an Aristotelian / natural law approach to corporate law - which I think can quite fairly be justified as an approach in keeping with the Christian tradition.
Under such an approach, I'd like to see considered the following fundamental questions: why do corporations exist? to what end are they created? are corporations necessary to the proper ordering and functioning of society? what characteristics serve the corporation well? what characteristics undermine the corporation?
Around answers to these and similar questions is how a natural law theory of corporate law could be constructed.
Additionally, such an approach would have a thing or two to say about shareholders as well. As both Susan and Lyman have mentioned, the myth of homo economicus does not fare well under such an approach - and this has important implications regarding the shareholder wealth maximization norm around which so much of corporate law is based.
3) How is a Christian perspective on corporate law different from communitarian theories of corporate law? Are they the same in the end? (With the exception of Steve Bainbridge's important work, most of the Christian perspectives seem to me to look a lot like communitarian insights).
Although largely overlapping with communitarian theories of corporate law, a Christian or natural law perspective on corporate law would feature one (at least one) very significant difference. Namely, the Christian / natural law focus would be guided by the principle of "the common good." This principle differs rather dramatically from the principles undergirding most communitarian theories, despite some similarities (both apparent and real).
Most basically, "the common good" refers to an objectively good state of affairs; a state of affairs that most readily contributes to the flourishing of both the person and society as a whole. Most communitarian theories don't really promote the "common good," but rather simply enlarge the number of constituencies for whom the corporate is said to be governed. This is basically a special-interest approach to corporate governance, where the special interests of one group (the shareholders) is simply joined by the special interests of various other stakeholder. That's not what common-good thinking is about.
Additionally, "the common good" refers, as mentioned, to a state of affairs that is objectively good. This diverges from communitarian theory, which has largely bought into the law-and-economics notion that utility maximization is the law's desideratum. But utility is a matter of subjective preferences, and the maximization of subjective preferences is not at all the same thing as the common good.
4) What is the audience of a Christian perspective on corporate law? (Other Christian believers? Those who don't share these beliefs?).
Perhaps it depends on what that perspective ultimately reveals. If, for example, the corporation is viewed as an institution necessary to one's eternal salvation, I'm doubtful that reforms predicated upon that perspective will play well outside the circle of believers.
If instead, the Christian perspective reveals truths about the corporation that are useful regardless of one's religious beliefs, then the audience of "Christian corporate law" should extend well beyond the circle of believers.
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1. Posted by Sarah Duggin on May 5, 2009 @ 15:48 | Permalink
Recognizing the Relevance of Faith to Corporate Law
Posted by Sarah Duggin
In the course of many years in practice, like most lawyers, I often found myself sitting with clients as they struggled to make hard decisions. On one occasion the CEO of a major corporation was facing a very difficult choice. He looked at me and asked, “How can I make this decision? What can I possibly do?” I replied, “In the end you need to do what you think is right.” He responded, “If only I could, but I don’t have that luxury. I have a company to run.” Fast forward several years to a law school classroom. It’s near the end of the semester in Corporations class, and we are talking about corporate ethics and social responsibility, specifically the fiduciary obligations of corporate directors facing a decision whether to expand the company’s business into an area that is legal but morally objectionable to many – e.g., a children’s video game company offered an opportunity to increase profits significantly by making “adult” videos featuring pornography and violence against women. The students are hesitant to address the moral and ethical issues. When we finally begin to do so, a student raises his hand and says, “I’m a very religious person. Don’t get me wrong. From a personal perspective I would never approve of pornography or violence against women, but faith is faith, and business is business. Corporate decision makers need to make and sell the products consumers will buy, regardless of their personal beliefs.”
I can’t help reflecting on the similarity between the views expressed by the CEO and the law student. Too often people believe that a personal moral compass has no place in corporate law or in business generally. They have taken the shareholder primacy norm so much to heart that they fail to see the connections between our own belief systems and behavior in the business world. Perhaps many of us are far too ready to put aside our belief systems in favor of the “morality of the marketplace” and to allow the market to determine the ethics of production, sales and marketing. This approach is quite appealing in many ways. It offers an ostensibly neutral framework for decision-making. At times, this neutrality serves to promote the public good. For example, several years ago many companies began to realize that embracing diversity in hiring and marketing was good business. That realization helped to promote a more equal society. But the apparent neutrality of the market can be counterproductive, too. When business and legal decision makers allow the market to serve as a personal moral compass, ethics and morality can become subservient to the passion for profits. It then becomes even more difficult to make critical decisions on matters such as risk management, product safety and employment policies. When profit alone becomes the guiding light for decision makers, morality and ethics fade into the background, and too often greed – on a personal and corporate level – emerges as the critical criterion for decisions. Decision makers rationalize avoidance of moral and ethical questions on grounds that the business is simply responding to the demands of consumers or working effectively with the commodity of labor or appropriately reducing risk to a monetary calculation. When this happens, integrity – in the sense of the completeness of the human person brought about by consistency in values, methods, and measures – becomes harder and harder to find, and both individuals and society pay a high price.
Faith -- whether defined broadly in terms of belief systems or more specifically in terms of particular religious beliefs – ought to have something to say about the ethics of law and business, and understanding the influence of faith on at least some decision makers might tell us more about why and how decisions are made. As Lyman Johnson points out, however, we have not yet engaged in “sustained scholarly attention as to how religious belief and corporate law (and corporate life) might be connected.” We need to develop that scholarship, and we need to think about how to incorporate it into our teaching in law and business schools. Students deserve to be exposed to the idea that faith -- as well as personal belief systems generally – can and does influence business decisions, just as they need to understand what can happen when managers and lawyers believe that they must set aside personal belief systems in favor of marketplace morality. In the end, it is up to business decision makers to determine what role, if any, faith will play in their work. However, if we do not at least explore the possibilities and offer alternative models, the notion that “faith is faith, and business is business” too often will prevail to the detriment of both corporate decision makers and society in general. Consequently, I applaud Lyman for initiating this discussion and Gordon for hosting it on The Conglomerate. I hope that this conversation will continue.
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