CORPORATE AFFECTIVITY AND MEMBERSHIP IN THE MORAL COMMUNITY

1. CORPORATE AFFECTIVITY AND MEMBERSHIP IN THE MORAL COMMUNITY PETER A. FRENCH, Ph.D., L.H.D. Lincoln Chair in Ethics Arizona State University

2. Membership in the Moral Community - Preliminaries • Members of the moral community = Proper targets of the critical perspective of morality – an accountability theory of responsibility. • To be a member of the moral community is to be the referent of any proper name or description that can be a non-eliminatable subject of a participant reactive attitude.

3. Membership in the moral community minimally requires the capacity to appreciate moral reasons as relevant to one’s act choices, the ability to react to those reasons appropriately, and thereby acknowledge ownership of one’s actions, and the capacity to participate in moral dialogue and address. • It has been argued that the reactive attitudes are misapplied when corporations and collectives are their subjects; only humans are appropriate subjects.

4. I take our accountability practices involving the expression of reactive attitudes at face value, e.g., my expression of indignation at BP for the Deepwater Horizon disaster is directed at BP, the corporation. • In effect: We regularly morally assess corporate behavior and express moral outrage about what corporations like BP do. • That suggests that we presume they have the ability to consider our criticism and respond in a morally appropriate fashion, qua corporation.

5. When a corporation enters into a dialogue about the moral appropriateness of what it has done –through its spokesperson, it is exposing the fact that it has the capacity for moral address. • Our reactive attitudes towards corporations should not be understood in the way that Kendall Walton understands our emotional reactions to fiction: as “make-believe.” • Which suggests that corporations are not, as Dworkin claims, fictions.

6. Clarification:Despite the title of a well-known paper I published in 1979 in which I propounded the theory that being a moral person was to exhibit a certain set of functional capacities, primarily intentionality, and that some corporations satisfied that criteria, I am talking about moral agents, not persons, as the members of the moral community. • To respond to criticism, admittedly invited by my word choice: “person”, I substituted “actor” or “agent” in the 1990s. It didn’t help much! • My position: the crucial functions for moral community membership in the prototypical case of humans are not uniquely possessed by humans.

7. 1. Moral Community Membership Conditions • A sketch: Members must exhibit certain functional capacities: (a) the ability to act intentionally, (b) the ability to make rational decisions, and (c) the ability to respond to events and criticisms by altering intentions and resultant behaviors. • In effect, members must be self-referential mechanisms with the following capacities: (1) Moderate reasons responsiveness; and (2)Affectivity, understood as the functional capacity to care about the moral quality of its actions.

8. If there are persuasive reasons why either (1) or (2) are never justifiably applicable to a subject that arouses our reactive attitudes, exclude it from the moral community. It is a moral alien. • With respect to such aliens we can only take what is called “an objective attitude.” • We don’t hold them morally accountable for what they do; we try to manage, regulate, or eliminate them. (Treat them rather like Aristotle’s conception of barbarians.)

9. Moderate Reasons Responsiveness • (Helping myself to work by Fischer and Ravizza: Responsibility and Control.) • Entities that exhibit moderate reasons responsiveness act from internal mechanisms that can: (1) recognize reasons as sufficient to act in a certain way: reasons receptivity; (2) translate those reasons into choices and act on those choices: reasons reactivity.

10. Receptivity = regularly receptive to reasons, if not in every case – The subject exhibits a pattern of reasons recognition. • Reactivity = the subject is weakly reactive to those reasons, i.e., the subject displays some reasons reactivity revealing that the subject has the executive power to do something because of its recognition of a reason to do it.

11. Definition: Something is moderately reasons responsive in a situationif it acts from an intentional internal mechanism that: (1) recognizes that there is a sufficient reason for it not to do what it is about to do, and (2) conceivably it would react to that reason in the circumstances, even if that is a rather remote possibility. • This excludes from moral appraisability most random groups and many collectives, especially those I’ve called fictive groups.

12. Affectivity • “Affectivity” is the capacity to care, in the Frankfurtian sense,about the moral quality of one’s actions; typically emerging in humans with the loss of moral innocence. • The subject views itself as an apt target of the reactive attitudes of others because of its actions (revealing its self-referentiality and social participation). • Caring about the moral quality of one’s actions is usually expressed as shame, guilt, pride, sorrow, regret, remorse, etc.

13. 2. Corporations • My corporate agency theoryascribes moderate reasons responsiveness to some corporations. • Those corporations have commitments, plans, intentions, and desires (first and second order) that do not necessarily align with and are not reducible to those of the humans they employ. • There are then two types of mechanisms that can be moderate reasons responsive: Neuro-psychological Mechanisms in humans and Organizational Mechanisms in corporations.

14. Corporate Affectivity • But can organizational mechanisms careabout the moral quality of their actions? • A number of writers (e.g. Deborah Tollefsen, Richard De George, and Mitchell Haney) argue that though they agree with my work on corporate intentionality, I must exclude corporations from the moral community because my work on moral maturity (the loss of innocence papers) essentially involves phenomenological affectivity and corporations cannot convincingly express that.

15. A case of being hoisted with my own petard! • Corporations do not exhibit the ability qua corporation, they argue, to recognize their capacity, for example, to do evil or morally wrongful things and that should be understood as showing that corporations per se lack the functional capacity to care about the moral quality of their actions, to have the appropriate self-reflective reactive attitudes.

16. If their argument is that corporations are not biological/neuro-psychological entities, then, of course, it is indisputable, but uninteresting. • They agree that corporations can plan, have intentions, exhibit recursivity; so they must have some degree of self-referentiality. They must be self-reflective to some degree as well. • The argument that corporations cannot express affectivity cannot rest on their not being capable of self-referentiality and self-reflection.

17. There must be more to affectivity in the minds of my detractors: The phenomenological “what is it likeness.” {The “they are not human”-retort!} • Corporations cannot be phenomenologically affective. Does that mean corporations must escape moral accountability? Reside outside the moral community (Aristotle’s barbarians?) • Problem: They are among the most powerful entities in the world. If ethical admonition and animadversion are impotent in controlling their behavior, all we are left with is legal regulation strategies, and not even soft law.

18. Tollefsen offers me three strategies to repel the “absence of corporate affectivity”- attack: • (1.) Differentiate human moral agency from corporate moral agency, each having its own criteria for being held accountable. Different mechanisms - different membership requirements. The corporate criteria excluding affectivity. (Virginia Held once proposed this strategy.) • Clearly, neuro-psychological and organizational mechanisms will evidence differences. But are they functionally different when it comes to meeting moral community membership requirements?

19. I cannot use Tollefsen’s first strategy. Doing so jettisons my own account of mature moral responsibility: A constitutive element of moral agency is the ability to respond to moral criticism with the self-reflective moral reactive attitudes (the ability to care about the quality of one’s actions) and alter one’s behavior accordingly. • David Silver’s alternative solution: Different kinds of moral responsibility: corporate and human. • Silver might have in mind that corporations can be only attributively responsible, while humans may also be accountably responsible.

20. I take it that means that attributing responsibility to a corporation for something is to identify some of its internal commitments/structures/policies that reveal the sort of entity it is (perhaps one with structural management deficiencies), but not to hold it accountable for what occurred. – [Air New Zealand and the crash on Mt. Erebus.] • Reject: I hold an accountability conception for all full-fledged members of the moral community.

21. (2.) (From Tollefsen) Give up the affectivity component for moral community membership. Maintain that intentionality is adequate. • My original paper may be read as holding this position – a recent writer claims that both Rawls and I are abstractionists when it comes to moral agency or moral personhood. • But Tollefsen’s second strategy is unacceptable: My account of moral maturity commits me to some sort of affectivity condition. (That petard again!)

22. (3.) Deny that corporations necessarily lack affectivity. • One way to do that is to adopt a cognitive theory of affectivity that does not involve the phenomenological “what it is likeness.” {To care about the moral quality of its action, a subject must exhibit a reactive attitude directed at a proposition that describes its action.} • I do not provide a propositional attitudes account of human moral maturity. {Perhaps I should or perhaps my account could be read as a cognitive theory of emotion, but Haney points out it is not.}

23. Tollefsen offers me a vicarious emotion theory in which corporate employees are “conduits for corporate emotions.” • Warning - Beware of helpful philosophers! • Example: A corporate employee speaking qua corporate employee tells me that she is sorry that I was double billed for a purchase on my credit card. • Tollefsen’s account: The employee’s voice on the phone is the vicarious moral-emotion expresser for the corporation. She is conveying corporate regret.

24. We can have vicarious reactive attitudes for others even if those others do not (cannot?) have the same attitudes. But for corporations? • For Tollefsen, corporations do not feel emotions; human emotions are corporatized; a notion I rather like, but not her account of it. • But suppose the woman on the phone does not feel the least bit sorry. Maybe no one in the corporation feels sorry for what occurred, none of Gilbert’s “membership sorrow.” How do we understand vicarious sorrow, when no one is sorry? Is vicarious sorrow unfelt, unexperienced, sorrow?

25. To be vicarious, on my understanding, sorrow would have to be undergone by one person substituting for another, sympathetic participation. • It is substitutionary. But it is hard to believe that the woman on the phone is sympathetically participating in the corporation’s experience of dismay at what it did to me by substituting her sorrow for what should have been its sorrow. • Where’s the sorrow?__________________________________________ • My account: Handling corporate affectivity will require reiteration of my general theory of corporate intentionality.

26. My Davidsonian-like account of corporate intentionality: X is an intentional action of corporation C, if at some level of true description an action (A) of a human [sometimes a machine or a human in conjunction with a machine] in an established role in C is redescribable, as licensed by the organizational, policy, and procedural rules of the CID Structure of C (its internal organizational mechanism), as intentionally done by C or intended by C.

27. CID Structures subordinate and synthesize the actions of various human persons (and/or the running of machines) into corporate intentional actions. • Every CID Structure has two elements: (1) an organizational flow chart that delineates stations and levels and (2) procedural and policy recognition rules. • The organizational chart provides the grammar of corporate decision-making. The internal recognition rules provide its logic.

28. The corporation appears as an intentional agent at the level of redescription that CID Structures (organizational mechanisms) make possible. • All moral agents appear on the moral stage by the wave of the wand of redescription. • CID Structures license the descriptive transformation of events, that under another descriptive aspect are the acts or bodily movements of humans or the running of machines, into corporate acts. They incorporate decisions, actions, and movements.

29. CID Structures also may, in fact generally do, contain conversion rules for the redescriptions of certain types of utterances by appropriate employees into descriptions of expressions of corporate self-reflective reactive attitudes. • When a corporate employee says, “We are sorry that we double billed your credit card account,” the employee does not regret the corporate act, is not ashamed about what happened. He or she is reading from a script.

30. You, however, are receiving an apology from the corporation because a true description of her reading from that script is “The corporation is expressing regret for what it did.” • It is as sincere as most apologies go. • It also makes no difference were it conveyed in a digitally engineered robotic voice. Most nowadays are!

31. An appropriate Barclays representative speaking to a TV camera: “We regret that we did not set honest Libor rates” - may be truly redescribed as “Barclays is expressing shame or guilt (or some other self-reflective reactive attitude) for its falsification of its London Interbank Offered Ratereports.” • I’m not sure what Barclays’ "We're clean, but we're dirty-clean, rather than clean-clean” expressed.

32. Expressions in the communal sphere of the self-referential reactive attitudes are, generally, performative, ritualistic, conventional. • They may be insincere if not “backed” by a certain feeling, like an apology without the feeling of remorse, but they are not void (see J.L. Austin). • A corporate employee expressing corporate regret is not vicariously feeling regret for the corporation. She is performing her corporate duty of communicating the corporation’s regret, regret that is only corporate if it arose from a corporate assessment of the moral quality of its actions in accord with its CID Structure.

33. That CID Structure licenses the description of what the employee says as a corporate communication. • Corporate regret or sorrow or shame is referentially opaque. • It is true that Barclays regrets, but not necessarily true that the Barclays’ spokesperson regrets, though Barclays’ expression of regret and the Barclay spokesperson expressing Barclays’ regrets are co-referential.

34. If the corporation continues the offending practice, we would have good grounds to regard its expressed regret as bogus, because its subsequent behavior would be telling us something about its organizational mechanism (a form of responsibility as attributability creeping in). An ineffectual compliance system? • If it takes corrective measures to assure nonrepetition, there is no reasonable ground to discredit its expression of regret, shame, guilt, etc. even if it were delivered somewhat inartfully by a robotic voice.

35. Objection: In the human case we require internal goings-on, not just communications, vocal expressions, but genuine emotional states, feelings. • Minus the feelings, the expression is typically thought to be hollow. • That is asking too muchof humans. • Generally, we take expressions of self-reflective reactive attitudes at face value, and only when they are at odds with subsequent behavior do we question their sincerity.

36. Corporations occasionally express shame. They may also claim to feel guilty. (Barclays admitted: “We are guilty of being part of the pack.”) Corporations frequently express pride in their products, their employees, etc. This sounds like the sort of affectivity we are after. • We might decide that corporate shame, guilt, and pride is different from human shame, etc. But that may be only because we expect humans to well up with those inner emotional states, when they express self-reflective reactive attitudes.

37. If having a certain inner neuro-psychological state (emotion) is the criterion for the correctness of the expression of a self-referential reactive attitude, then corporations must fail to meet the affectivity criteria. • However, there is a famous Wittgensteinian argument that in the case of humans throws that criterion in doubt. • The important question is “How do corporations become self-referential in a way that makes their expressions of self-reflective reactive attitudes believable?” • Carlos Gomez-Jara offered me an answer.

38. “Thanks to recent developments in the field of communication science, systems theory explains how consciousness and communication show nearly the same degree of self-referentiality, recursivity, and reflection.” (Gomez-Jara) • Gomez stresses a basic functional similarity between the neuro-psychological mechanism that is the human seat of self-referentiality, reasons responsiveness, and affectivity, and the organizational mechanism that must be the corporate seat of the same capacities.

39. A neuro-psychological or an organizational system can only differentiate itself from its environment and other systems if it refers to itself and its elements. • A neuro-psychological system generates a description of itself through consciousness (self-observation). • Communications do the same sort of thing for organizational mechanisms. Communications in a corporation are recursively produced and reproduced and a system/environment (corporation/environment) differentiation is developed and maintained. [Gomez calls this “autopoietic reproduction.”]

40. The dynamics of recursivity in corporate communications provides the foundation for self-referential affectivity and something typically called “corporate culture.” • Corporations can insure that they have the capacity to care about the moral quality of their actions, express appropriate reactive attitudes, and react accordingly by so engineering their organizational mechanisms that are primarily recursive communication processes. On some accounts, such as Gomez’s, that happens as a natural by-product of corporate communication.

41. I am still a functional engineer, but I am willing to entertain the possibility that through a repetitive process of corporate communicational recursivity the corporate moral agent emerges capable of moderate reasons responsiveness and the capacity to care about the moral quality of its actions. • Bottom line: With appropriately engineered CID Structures, corporations can become adequately self-referential and self-reflective and so fully normatively competent, and mature members of the moral community.

42. Admittedly, when we hear the corporatized voice on the phone offering regret for having double billed a credit card account, it’s natural to conclude that the regret is insincere, not because we are worrying about how a corporation has feelings, but because it is hard to believe that any plan to curtail the practice within the corporation is in the offing. • That is cynical on our part, but we tend to take an expression of regret by anyone who has benefited from a wrongdoing, be it a human or a corporation, with a grain of salt.

43. So – Many corporations are not illegitimate aliens in the moral community. They are normatively competent, can express affectivity, own their actions, and should be treated as such and not as fictions or like innocent children or as Aristotelian barbarians. • Some corporations, however, are merely shells that have no self-referential or reasons-responsive capacities. Others are closely held, alter-egos of their owner/managers. • Neither of those achieve moral agency qua corporation. They may be comparable to young children – immature – and some are created (or destined) to remain so and can only be regulated.

44. Addendum: Citizens United: Some Good, Maybe; Some Bad, Indeed • Because of my work on corporate moral agency and frequent citations of it in the legal literature, I have been often asked to comment on Citizens United. • Citizens United confers on American corporations protection against political speech challenges under the First Amendment of the US Constitution.

45. Maybe Good: • Gomez’s maintains: because Citizens United, byawarding a fundamental right at the core of modern democracy to corporations, makes corporations citizens of some sort, albeit not voting citizens, it may be interpreted as also burdening them with legal obligations in criminal law and that provides a rationale for punishing them, qua corporations, for the unlawful exercise of the rights they possess.

46. The Bad: Justice Scalia, wrote of corporate speech: “It is the speech of many individual Americans who have associated in a common cause, giving the leadership ... the right to speak on their behalf.” • Setting aside the fact that many of those affiliated in one way or another with an American corporation may not be Americans, the mechanism of corporate decision-making and action reveals that Justice Scalia’s position, corporations speak on behalf of those associated with them, is just false.

47. A corporation’s expressions of its opinions, beliefs, desires, plans, intentions, etc. are not necessarily those of the people expressing them. • Corporate speech, like corporate action, is speech of the corporation. It is one of the ways by which corporations express and pursue their corporate interests and express the beliefs, plans, desires, goals, etc. that motivate their corporate actions. • There is no necessary connection between what corporate speech expresses and the beliefs, desires, interests, plans, and goals of those employed by the speaking corporation, hold its stock, or are otherwise affiliated with it.

48. Hence, protecting corporate speech is not indirectly protecting the speech of corporate employees, stockholders, or other corporate affiliates, and their speech as individuals is already protected. • The question that the Justices should have been asking is whether corporate speech is entitled to First Amendment protection in its own right. • To answer that in the affirmative, I suppose, would have been to grant citizenship to corporations, to make them full-fledged political persons. Perhaps, for even the Supreme Court, that would have been a bridge too far.

49. Bibliography • Aristotle, Nicomachean Ethics. • Austin, J.L. 1965. How To Do Things With Words. Oxford: Oxford University Press. • De George, R. 1986. “Corporations and Morality.” In Shame,Responsibility, and the Corporation, edited by Hugh Curtler. New York: Haven Publications. • Fischer, J. & Ravizza, M. 1998. Responsibility and Control. Cambridge: Cambridge University Press. • Frankfurt, H. 1988. The Importance of What We Care About. Cambridge: Cambridge University Press. • French, P. 1979. “The Corporation as a Moral Person.” AmericanPhilosophical Quarterly 16: 207-15. • French, P. 1984. Collective and Corporate Responsibility. New York: Columbia University Press. • French, P. 1992. “Losing Innocence for the Sake of Responsibility.” In Responsibility Matters. 29-43. • French, P. 1992. Responsibility Matters. Lawrence, KS: University of Kansas Press. • French, P. 1995. Corporate Ethics. Fort Worth, TX: Harcourt Brace.

50. French, P. 1996. “Intergrity, Intentions, and Corporations.” American Business Law Journal 34. • French, P. 2003. “Inference Gaps in Moral Assessment and the Moral Agency of Health Care Organizations.” In Institutional Integrity in Health Care, edited by Ana Smith. Kluwer. • French, P. 2011. War and Moral Dissonance. Cambridge: Cambridge University Press. • Gilbert, M. 2000. Sociality and Responsibility. Lanham, MD: Rowman & Littlefield. • Gomez-JaraDiez, C. 2008. “Corporations as Victims of Mismanagement: Beyond the Shareholders vs. Managers Debate,” Pace University Law Review. • Gomez-JaraDiez, C. 2010. “Corporate Culpability as a Limit to the Overcriminalization of Corporate Criminal Liability,” New CriminalLaw Review. • Gomez-JaraDiez, C. 2011. “Corporate Criminal Liability in the Twenty-First Century: Are All Corporations Equally Capable of Wrongdoing?” Stetson Law Review.