This Article examines the role of corporate law in promoting sustainable peace. The Author argues that corporate legal theory can make a distinctive contribution to a more peaceful world by exposing some deeper roots of corporate law doctrines. Beginning with a brief overview of the corporation in legal discourse, the Article addresses the corporation as property, person, contract, and community. Next, the Article explores the significance of legal language, detailing the ways the law, through language, constructs and impacts the "character," "culture," and "community" of society. The Article then analyzes the dominance that the property and contract conceptions of the corporation demonstrate over the person and community notions of the corporate entity. Using a specific case as an illustration of how basic understandings of the corporate entity affect the sense of corporate responsibility for corporate harms, the Author focuses on how the contract and property notions overwhelm the community notion of the corporation. Finally, the Article concludes that the person and community notions of the corporation offer the better prospects for the goal of sustainable peace by enlarging the sense of corporate responsibility for harms associated with corporate undertakings.
CONCEPTIONS OF THE CORPORATION AND THE PROSPECTS FOR SUSTAINABLE PEACE
The question of sustainable peace is, by and large, a new one for corporate law. While there is a rich literature exploring corporate social responsibility, the role of the corporation in promoting peace has not been the focus of scholarly inquiry. This does not mean, of course, that such an inquiry is an inappropriate one. Posing new questions is one of the central roles of legal theory. Even when the outcome of such inquiries is uncertain, asking novel questions can be fruitful, sometimes in unforeseen ways. For, as John Coffee wrote, "Better answers often await better questions." (1)
In examining the role of corporate law in promoting sustainable peace, this Article develops the particular perspective of legal theory on the question. The aim is simply to expose some connections between the basic ways in which the law understands and talks about corporations and the goal of sustainable peace.
As an exercise in legal theory, this Article is fraught with both limits and possibilities. The limits are more immediately obvious. This Article does not call for a particular regime of new corporate law rules nor does it present a practical program for changing the status quo, though change is both necessary and desirable. Even when it is argued that certain basic conceptions of the corporation hold the greatest potential for enabling the corporation to contribute to sustainable peace, the larger claim that such conceptions of the corporation are more descriptively accurate or normatively justifiable than their rivals is not made. (2)
This Article takes such an approach to show how some of the central possibilities of developing legal theory in this regard lie elsewhere. Corporate legal theory can make a distinctive contribution to a more peaceful world by exposing some of the deeper roots of corporate law doctrines. The world of legal theory might seem far removed from the realm of armed conflict, but the ways in which legal norms are thought about and spoken about create the basis for the harms inflicted. If the aim is to examine thoroughly the roots of discord in the world, one needs to explore the words through which humans acknowledge and interact with one another.
Given the powerful role of corporations in daily life, this is particularly important in the discourse on corporations. Underlying this Article is the view that the way that corporations are talked about matters. It matters because of the creative role language plays. In its creative role, language helps to construct the realities it describes. As philosopher Charles Taylor writes, "If we are partially constituted by our self-understanding ... then language does not only serve to depict ourselves and our world, it also helps constitute our lives." (3)
Because the corporation is a distinctively legal institution, it matters especially how the law talks about corporations. From the standpoint of the law, the corporation is never simply an objective, external phenomenon. Rather, the character of the corporation is intimately intertwined with the law's choices. In an important sense, the corporation is whatever the law decides it should be.
This Article begins with a brief overview of the corporation in legal discourse. In this overview, the Author draws upon current corporate law scholarship, considering the notions of the corporation as (1) property, (2) person, (3) contract, and (4) community.
Following this overview, the Article explores the particular significance of legal language, detailing some of the central ways the law constructs greater society. The law plays this constructive role by constituting and transforming understandings of "character," "culture," and "community."
Examining the ways in which basic corporate conceptions contribute to understanding of these three central elements of the business environment brings into view how legal language can structure the sensibility and vision (4) brought to corporate law problems. Each conception of the corporation presents it in a certain light, giving to the corporation a certain "character." Each character thus presented is in turn intertwined with a culture--"a set of ways of claiming meaning" (5)--that can justify a greater or lesser sense of community.
Against this backdrop, the Article closely examines the significance of allowing the property and contract conceptions of the corporation to dominate over the person and community notions of the corporate entity. Whereas the notion of property justifies a corporate failure to act for the benefit of non-shareholder constituencies, the notion of person gives rise to a corporate obligation to act for the welfare of these constituencies. While viewing the corporation as contract brings to the fore the external, contingent nature of corporate relationships, seeing the corporation as community reveals a richer constitutive role for corporate relationships.
The Article focuses on a recent case, John Doe I v. Unocal Corporation, (6) to illustrate how these understandings of the basic concepts of the corporation brought to the business environment can significantly affect the understanding of corporate responsibility for the harms involved with corporate ventures. The case highlights how two of these corporate conceptions--the notion of the corporation as property and the notion of the corporation as contract--work to diminish the sense of community in corporate undertakings. Under the sway of this diminished sense of community, the law at crucial junctures divorces corporate responsibility from corporate harm. In doing so, it lessens the prospects of a genuine corporate contribution to sustainable peace.
The Article concludes that, while the notions of the corporation as property and contract predominate in current corporate law scholarship, the concepts of the corporation as person and community offer better prospects to achieve the goal of sustainable peace. They do so because of the way they enlarge the sense of corporate responsibility for the harms associated with corporate undertakings. Because this greater sense of corporate responsibility works to eliminate or minimize such harms, it contributes to the corporation's ability to foster long-term cooperative relationships among all of its stakeholders. Thus, if corporations are to contribute to the creation of a more peaceful world, legal discourse can help by revitalizing one of its old notions, the corporation as person, and more fully embracing a new one, the corporation as community.
OVERVIEW OF THE CORPORATION IN LEGAL DISCOURSE
Legal discourse has a long history of grappling with the basic nature of the corporation. At the most immediate level, this grappling with the character of the corporation is understandable. For, in a practical way, the corporation can be many things to many people. To shareholders, it is the source of investment returns. For employees, the corporation is a provider of jobs. Communities look to corporations as dispensers of tax revenues. For top executives, the corporation is a source of personal power.
It is little wonder that legal theorists have struggled with words in attempting to formulate concepts of the corporation in the complex and nuanced language of the law. Even though there are periodic attempts to avoid these debates in corporate theory, (7) the problem of the fundamental character of the corporation is a pervasive and reoccurring one. Like many philosophical questions, it resists definitive resolution.
The resistance to definitive resolution has its roots in two basic features of legal discourse about the nature of the corporation. First, the corporate entity presents for legal discourse the problem of descriptive accuracy.
The contemporary corporation presents a descriptive problem for the law because of a basic incongruity between the corporate entity and the legal system's underlying conceptual framework. At its core, the law is marked by a dichotomy of person and property.
Fundamental to our legal system is the distinction between `persons' and `property.' The distinction, roughly put, is one between that which `acts' and that which is `acted upon.' The essentially active nature of the person is evident from the law's conception of the person as the subject of rights and duties. Rights and duties, after all, imply an active subject, one who may exercise privileges and fulfill obligations. Similarly, the notion of property as an entity `acted upon' or essentially passive is also readily apparent. Central to the law's definition of property is its susceptibility to ownership. The traditional...