Constitution Daily

Smart conversation from the National Constitution Center

Can for-profit corporations be good citizens?

September 15, 2011 by Nien-he Hsieh

 

Editor's Note: Nien-he Hsieh will moderate a public program on corporate social responsibility at 6 p.m. tonight at the National Constitution Center. For reservations and more information about the program, presented by the Penn Program on Democracy, Citizenship and Constitutionalism, click here
Foreign factories in Canton, China, 1825-35 (Wikimedia Commons)

What is the proper role of the for-profit corporation and what are its responsibilities? Is its role to produce income and wealth? Or is its role better understood as providing goods and services to fulfill unmet needs? Must it even have a purpose at all? Do managers have a responsibility to promote employee interests and to protect the environment beyond what is required by law? Or would it be inappropriate for them to take this upon themselves? These are some of the questions that we will take up at the National Constitution Center tonight.

These questions, of course, are not unique to our panel. These are questions on the minds of many given the impact and importance of for-profit corporations in society today. If so, why frame questions about the role and responsibilities of the for-profit corporation in terms of citizenship? What is added by asking the question, “Can for-profit corporations be good citizens?”

One thing the question highlights is the civic nature of the corporate responsibilities under debate. Citizenship is about membership in a political community, and being a good citizen is about meeting one’s responsibilities to the community as a whole. So framing the debate about corporate responsibilities in terms of good citizenship invites us to examine the for-profit corporation from the perspective of the political community. For example, how should we understand the proper role of the for-profit corporation in the political process? In times of crisis, does the for-profit corporation have broader civic responsibilities?

To ask about the corporation as citizen is to ask citizens about their visions for the for-profit corporation.

At the same time, to ask “can for-profit corporations be good citizens” is to consider explicitly the possibility that they cannot. For some, it simply may be a mistake to evaluate the for-profit corporation against the standard of good citizenship. The for-profit corporation, they may say, is nothing more than a means for organizing economic production. Others may want to use that standard, but believe that on their own, for-profit corporations will fall short.

Whatever one believes about applying the standard of good citizenship to the for-profit corporation, there is another thing the reference to citizenship recalls. That is the legal and political context for debates about the for-profit corporation. In looking around the world, we see that the role and responsibilities of the for-profit corporation reflect the legal and political system of which it is a member. The operation of for-profit corporations depends upon a legal framework that recognizes their creation and continued existence, and the specifics of that legal framework are open to political debate. To ask about the corporation as citizen then is to ask citizens about their visions for the for-profit corporation.

We invite you to join that conversation.

Nien-he Hsieh is an associate professor of legal studies and business ethics at the University of Pennsylvania's Wharton School of Business.
 

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