Corporate Ethics in a Devilish System

Abstract

Prepared for a roundtable on corporate ethics at the University of Maryland School of Law, this essay argues that discussions of corporate ethics that focus on mere compliance with law are too narrow. While an emphasis on legal compliance is indeed crucial, a dedication to legality standing alone is hardly a robust sense of ethics, corporate or otherwise. Whether one takes guidance from religious norms or from secular philosophers, there are significant areas of agreement as to what amounts to ethical behavior: acting with due care for others; taking responsibility for the effect of one's actions; being honest; considering broadly one's impacts; and taking a long-term view, especially with regard to resource use. Corporate law and financial markets operate to make these ethical obligations difficult to satisfy in a business setting. Limited liability, for example, is inconsistent with the ethical norm of taking responsibility for one's own actions since it shields people from liability that arises from their wrongful conduct. This essay argues that we should adjust the law to make ethical norms real and impactful. If the corporations, as institutions, are indeed without consciences - the prototypical Holmesian "Bad Man" - and corporate managers are limited by their role morality, then the way to make corporate ethics more than a public relations gimmick is to embody them in law.