a post by Chris MacDonald for The Business Ethics Blog
I’ve long held that you can’t understand much about business ethics if you don’t understand a bit about markets (their role and limits), corporations (their nature and purpose), and managers (their role and the limits on it). Of those three, it is perhaps the corporation that raises the most controversy, although the other two certainly generate their share.
A corporation is, very roughly, an entity recognised by the law and that exists independently of the people who form it. The general term “corporation” includes business corporations (Walmart, Amazon, etc.), as well as cooperatives (such as ACE Hardware and Dairy Farmers of America) and nonprofit corporations (including charities, universities, hospitals, etc.). Some churches are corporations too.
Corporations are treated as persons under the law just about everywhere. The notion has raised controversy in the US, especially in the wake of the 2010 Citizens United* decision of the US Supreme Court. But that controversy sometimes leads people to miss the fact that corporate personhood isn’t some idiosyncratic American thing. Corporations are treated as persons pretty much everywhere. (If you know an exception, let me know in the Comments section below). Take Canada’s criminal code, for example. The Criminal Code is full of sentences that say “every one who” or “every person who” does such-and-such is guilty of a crime. In the Definitions section of the Code, it clarifies that those terms (“every one” and “person”) are to be read as including organisations, and that “organisation” means “a public body, body corporate, society, company, firm, partnership, trade union or municipality” (and certain kinds of associations).
Continue reading noting that the examples are from North America. I have read it carefully and can find, from my limited knowledge of corporate law, nothing that cannot be applied in the UK.
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