The moral compass
Corporations aren’t moral agents, creating interesting dilemmas for business leaders
MANAGEMENTSPEAK: You are right on target.
TRANSLATION: You agree with me.
— This week’s unnamed contributor explains the nature of accuracy.
ACCORDING TO OUR national philosophy, we have a government ” … of the people, by the people, and for the people.”
People, in other words, precede government, which is why people have inalienable rights. Corporations, in contrast, are legal fictions. They exist only within the framework of government and have whatever rights and privileges we give them. Government can revoke or extend any or all of those rights at any time without raising constitutional issues.
I mention this because people often talk about corporations as if they were humans, only bigger. “Our budget is like your household budget,” is a favorite example used by executives to explain why the company can’t afford something important.
The company budget, however, has little in common with my household budget. I subscribe to cable television, go to the movies, buy new clothes even when the old ones haven’t worn out, and enjoy a bunch of other stuff for which there’s no ROI of any kind. Unlike most corporations, I spend a significant chunk of my budget on fun stuff.
Also, I’ve never downsized either of my children, no matter how tight the budget or how annoyed I am that one or the other left dirty socks on the couch.
Here’s another: “We do the right thing.” I don’t even know what that means, especially since the company also maximizes shareholder value. In biological terms, morality is a species-specific trait of Homo sapiens. John Wayne Gacy’s behavior was immoral (and nauseating). In contrast, when a seagull eats a chick from the nest next to its own, it isn’t acting immorally at all. Morality applies only to human beings.
Corporations, not being big Homo sapiens, aren’t moral entities (for more on this subject, check out Carlton Vogt’s Ethics Matters column ” A Moral Quandary “). They are, however, supposed to obey the laws and regulations that define acceptable boundaries of corporate behavior. It’s because corporations aren’t moral entities that we need extensive laws and regulations — they have no internal restraints.
This creates a dilemma. You are a moral entity, and confine your actions to what your moral code allows. But you’re employed by a corporation, which isn’t a moral entity, and you’re supposed to act in that corporation’s best interests. I’ve even been told that this is a moral obligation.
Nonsense. “Maximizing shareholder value” is a financial proposition, not a moral one.
Which is why, if you want your company to behave morally, you’ll have to bring the morality there yourself.
