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Can Corporations Be Held to the Public Interest, or Even to the Law?

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  • David Ciepley

Abstract

This article addresses our failing ability to hold business corporations to the public interest, or even to bare legality. It defends, in brief compass, the reasonableness of the expectation that corporations provide public benefits as consideration for their public privileges. But as succeeding sections recount, the traditional instrument for holding corporations to the public interest has gradually been undermined; and our standard, punitive tools for holding them even to bare legality, suffer from inherent limitations and fail adequately to deter corporate misconduct. A more adequate approach would be to supplement the current punitive regime with reform of corporate governance in directions that would decrease the temptation of managers to engage in misconduct in the first place. Several possibilities are considered, with the most promise found in allowing corporations to be owned by Danish-style “industrial foundations.” Among its advantages, the reform is realizable and would reduce incentives to corporate misconduct without compromising on performance. Industrial foundations also customarily direct a portion of corporate profits to charity, in effect reinstating the norm that for-profit corporations provide public benefits.

Suggested Citation

  • David Ciepley, 2019. "Can Corporations Be Held to the Public Interest, or Even to the Law?," Journal of Business Ethics, Springer, vol. 154(4), pages 1003-1018, February.
    • Handle: RePEc:kap:jbuset:v:154:y:2019:i:4:d:10.1007_s10551-018-3894-2
    DOI: 10.1007/s10551-018-3894-2
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    References listed on IDEAS

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    1. Ciepley, David, 2013. "Beyond Public and Private: Toward a Political Theory of the Corporation," American Political Science Review, Cambridge University Press, vol. 107(1), pages 139-158, February.
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    3. Matt Hopkins & William Lazonick, 2016. "The Mismeasure of Mammon: Uses and Abuses of Executive Pay Data," Working Papers Series 49, Institute for New Economic Thinking.
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    Cited by:

    1. Karol Marek Klimczak & Alejo José G. Sison & Maria Prats & Maximilian B. Torres, 2022. "How to Deter Financial Misconduct if Crime Pays?," Journal of Business Ethics, Springer, vol. 179(1), pages 205-222, August.
    2. Blanche Segrestin & Kevin Levillain & Armand Hatchuel, 2022. "Management & Law: The Forgotten Contribution of P. Selznick," Post-Print hal-03609700, HAL.
    3. Ciepley David, 2020. "How America’s Corporations Lost their Public Purpose, and How it Might be (Partially) Restored," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 10(3), pages 1-25, December.
    4. Anne Vijver, 2022. "Morality of Lobbying for Tax Benefits: A Kantian Perspective," Journal of Business Ethics, Springer, vol. 181(1), pages 57-68, November.
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