May 04, 2009
A Possible Christian Perspective on Corporate Law
Posted by Ronald Colombo

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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