IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v154y2019i4d10.1007_s10551-018-3894-2.html
   My bibliography  Save this article

Can Corporations Be Held to the Public Interest, or Even to the Law?

Author

Listed:
  • David Ciepley

Abstract

This article addresses our failing ability to hold business corporations to the public interest, or even to bare legality. It defends, in brief compass, the reasonableness of the expectation that corporations provide public benefits as consideration for their public privileges. But as succeeding sections recount, the traditional instrument for holding corporations to the public interest has gradually been undermined; and our standard, punitive tools for holding them even to bare legality, suffer from inherent limitations and fail adequately to deter corporate misconduct. A more adequate approach would be to supplement the current punitive regime with reform of corporate governance in directions that would decrease the temptation of managers to engage in misconduct in the first place. Several possibilities are considered, with the most promise found in allowing corporations to be owned by Danish-style “industrial foundations.” Among its advantages, the reform is realizable and would reduce incentives to corporate misconduct without compromising on performance. Industrial foundations also customarily direct a portion of corporate profits to charity, in effect reinstating the norm that for-profit corporations provide public benefits.

Suggested Citation

  • David Ciepley, 2019. "Can Corporations Be Held to the Public Interest, or Even to the Law?," Journal of Business Ethics, Springer, vol. 154(4), pages 1003-1018, February.
    • Handle: RePEc:kap:jbuset:v:154:y:2019:i:4:d:10.1007_s10551-018-3894-2
    DOI: 10.1007/s10551-018-3894-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10551-018-3894-2
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-018-3894-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    2. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    3. Laufer, William S., 2006. "Corporate Bodies and Guilty Minds," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226470405, October.
    4. Ciepley, David, 2013. "Beyond Public and Private: Toward a Political Theory of the Corporation," American Political Science Review, Cambridge University Press, vol. 107(1), pages 139-158, February.
    5. Matt Hopkins & William Lazonick, 2016. "The Mismeasure of Mammon: Uses and Abuses of Executive Pay Data," Working Papers Series 49, Institute for New Economic Thinking.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Karol Marek Klimczak & Alejo José G. Sison & Maria Prats & Maximilian B. Torres, 2022. "How to Deter Financial Misconduct if Crime Pays?," Journal of Business Ethics, Springer, vol. 179(1), pages 205-222, August.
    2. Blanche Segrestin & Kevin Levillain & Armand Hatchuel, 2022. "Management & Law: The Forgotten Contribution of P. Selznick," Post-Print hal-03609700, HAL.
    3. Simon Oldham, 2024. "Embedding Owner-Manager Values in the Small and Medium Sized Enterprise Context: A Lockean Conceptualisation," Journal of Business Ethics, Springer, vol. 194(3), pages 561-581, October.
    4. Ciepley David, 2020. "How America’s Corporations Lost their Public Purpose, and How it Might be (Partially) Restored," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 10(3), pages 1-25, December.
    5. Anne Vijver, 2022. "Morality of Lobbying for Tax Benefits: A Kantian Perspective," Journal of Business Ethics, Springer, vol. 181(1), pages 57-68, November.
    6. Michael Bennett, 2023. "Managerial Discretion, Market Failure and Democracy," Journal of Business Ethics, Springer, vol. 185(1), pages 33-47, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ciepley David, 2020. "How America’s Corporations Lost their Public Purpose, and How it Might be (Partially) Restored," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 10(3), pages 1-25, December.
    2. S. Ravid & Suman Basuroy, 2003. "Managerial Objectives, the R-Rating Puzzle and the Production of Violent Films," Yale School of Management Working Papers ysm383, Yale School of Management.
    3. Jacobsen, Catrine & Piovesan, Marco, 2016. "Tax me if you can: An artifactual field experiment on dishonesty," Journal of Economic Behavior & Organization, Elsevier, vol. 124(C), pages 7-14.
    4. Gregory J. Robson, 2023. "How to Object to the Profit System (and How Not To)," Journal of Business Ethics, Springer, vol. 188(2), pages 205-219, November.
    5. Arrunada, Benito & Paz-Ares, Candido, 1997. "Mandatory rotation of company auditors: A critical examination," International Review of Law and Economics, Elsevier, vol. 17(1), pages 31-61, March.
    6. Raymond O. S. Zaal & Ronald J. M. Jeurissen & Edward A. G. Groenland, 2019. "Organizational Architecture, Ethical Culture, and Perceived Unethical Behavior Towards Customers: Evidence from Wholesale Banking," Journal of Business Ethics, Springer, vol. 158(3), pages 825-848, September.
    7. Jian Zhang, 2018. "Public Governance and Corporate Fraud: Evidence from the Recent Anti-corruption Campaign in China," Journal of Business Ethics, Springer, vol. 148(2), pages 375-396, March.
    8. Gabriele Jahn & Matthias Schramm & Achim Spiller, 2005. "The Reliability of Certification: Quality Labels as a Consumer Policy Tool," Journal of Consumer Policy, Springer, vol. 28(1), pages 53-73, December.
    9. Chan, Chia-Ying & Chou, De-Wai & Lin, Jane-Raung & Liu, Feng-Ying, 2016. "The role of corporate governance in forecasting bankruptcy: Pre- and post-SOX enactment," The North American Journal of Economics and Finance, Elsevier, vol. 35(C), pages 166-188.
    10. Kirstein, Roland, 2003. "Imperfect Monitoring of Monitoring Agents: One Reason Why Hierarchies Can Be Superior to "Lean" Organizations," CSLE Discussion Paper Series 2003-07, Saarland University, CSLE - Center for the Study of Law and Economics.
    11. Vivek Soundararajan & Jill A. Brown, 2016. "Voluntary Governance Mechanisms in Global Supply Chains: Beyond CSR to a Stakeholder Utility Perspective," Journal of Business Ethics, Springer, vol. 134(1), pages 83-102, March.
    12. Sascha Behnk & Iván Barreda-Tarrazona & Aurora García-Gallego, 2018. "Punishing liars—How monitoring affects honesty and trust," PLOS ONE, Public Library of Science, vol. 13(10), pages 1-30, October.
    13. Choi, Daewoung & Gam, Yong Kyu & Shin, Hojong, 2020. "Corporate fraud under pyramidal ownership structure: Evidence from a regulatory reform," Emerging Markets Review, Elsevier, vol. 45(C).
    14. Mauricio Villamizar‐Villegas & Freddy A. Pinzon‐Puerto & Maria Alejandra Ruiz‐Sanchez, 2022. "A comprehensive history of regression discontinuity designs: An empirical survey of the last 60 years," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1130-1178, September.
    15. Dietl, Helmut M. & Duschl, Tobias & Lang, Markus, 2011. "Executive Pay Regulation: What Regulators, Shareholders, and Managers Can Learn from Major Sports Leagues," Business and Politics, Cambridge University Press, vol. 13(2), pages 1-30, August.
    16. Stephen Chen, 2010. "The Role of Ethical Leadership Versus Institutional Constraints: A Simulation Study of Financial Misreporting by CEOs," Journal of Business Ethics, Springer, vol. 93(1), pages 33-52, June.
    17. Lars Helge Hass & Monika Tarsalewska & Feng Zhan, 2016. "Equity Incentives and Corporate Fraud in China," Journal of Business Ethics, Springer, vol. 138(4), pages 723-742, November.
    18. Sundgren, Stefan & Alexeyeva, Irina, 2022. "Entrepreneurs’ legal infractions and hidden information: Evidence from small business bankruptcies," International Review of Law and Economics, Elsevier, vol. 69(C).
    19. Sikka, Prem & Stittle, John, 2019. "Debunking the myth of shareholder ownership of companies: Some implications for corporate governance and financial reporting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 63(C).
    20. Quentin Dupont & Jonathan M. Karpoff, 2020. "The Trust Triangle: Laws, Reputation, and Culture in Empirical Finance Research," Journal of Business Ethics, Springer, vol. 163(2), pages 217-238, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:154:y:2019:i:4:d:10.1007_s10551-018-3894-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.