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The Trouble with Corporate Conscience

Posted by on Friday, October 19, 2018 in Essays, Volume 71, Volume 71, Number 5.


Accomplished corporate law scholars claim that modern
businesses need an infusion of morality. Disappointed by conventional
regulatory responses to recurring corporate scandal, these scholars
argue that corporate conscience provides a more fruitful path to systemic
economic reform. In Burwell v. Hobby Lobby, which held that for-profit
businesses can claim religious exemptions from general laws, the
Supreme Court gave this notion of corporate conscience added
momentum. Emboldened by the Court’s embrace of business goals
extending beyond shareholder profit, proponents of a moralized
marketplace now celebrate corporate conscience as an idea whose time
has come.

This Essay criticizes the leading arguments for corporate
conscience. These arguments identify three plausible sources of corporate
morality—shareholders, managers, and society as a whole. Although
initially appealing, each account ultimately proves impractical,
illegitimate, or self-defeating. These shortcomings not only give us
reason to reject existing accounts on their own terms, but may also reveal
a more accurate and attractive picture of the modern corporate world.

James D. Nelson