Morality of Corporations

Many people complain about corporations, but there are also those whose criticism goes further and who hold corporations morally to blame for many of the problems in Western society. Their criticism is not reserved solely for fraudulent or illegal business activities, but extends to the basic corporate practice of making decisions based that this criticism is flawed because it inappropriately applies ethical principles to economic relationships.

It is only by extension that we attribute the quality of morality to corporations, for corporations are not persons. Corporate responsibility is an aggregation of the responsibilities of those persons employed by the corporation when they act in and on behalf of the corporation. Some corporations are owner operated, but in many or CEO, who runs the corporation is said to have a fiduciary obligation.

The economists argue that a CEO’s sole responsibility is to the owners, whose primary interest, except in charitable institutions, is the protection of their profits. CEOs are bound, as a condition of their employment, to seek a profit for the owners. But suppose a noncharitable organization is owner operated, or, for some should still work to maximize profits, because that will turn out best for the public anyway.

But the economists’ position does not hold up under careful scrutiny. For one thing, although there are, no doubt, strong underlying dynamics in national and international economies that tend to make the pursuit of corporate interest contribute to the public good, there is no guarantee—either theoretically or in practice—that a given CEO as penalty or dismissal, ultimately do not excuse the individual from the responsibility for acting morally.