This Week – NEW TOPIC (sort of).
Recall that the first premise, the one that applied to both arguments,
Friedman presented two weeks ago was that ‘When we’re talking about
‘Corporate Responsibility’, what we’re really talking about are the
responsibilities of corporate executives’. At the time, I also said that this
premise would be accepted by all of the authors, which was true, UNTIL
Jennifer Moore: Corporations are not always reducible to their individual
members in terms of responsibility; sometimes, the ‘corporate
character/culture’ is responsible, and no one person.
Manuel Velasquez: Corporations are always reducible to their individual
Jennifer Moore – Corporate ‘Character’ and the Federal Sentencing
Guidelines for Organizations (US).
Corporations can, and should, as abstract entities distinct from their
individual members, be held responsible for the illegal actions of those
members when those actions were caused by the Corporation’s
There is good reason to believe that the ‘corporate character theory of
criminal liability’ is affirmed by/implicit in the Federal Sentencing
Guidelines for Organizations.
Part 1. Corporations should be held criminally responsible for the actions of
Part 2. The ‘Corporate Character Theory’ provides the best explanation for
why the corporation should be held criminally liable.
Part 3. The Federal Sentencing Guidelines do, and should, incorporate the
important aspects of the Corporate Character Theory into their rule system.
We might not think that Corporations can or should be held criminally
responsible for the actions of their agents, e.g., because they are ‘fictitious
But individuals acting on behalf of the Corporation don’t often have free
choices, but choices governed by the policies/rules/procedures of the
When that is the case, it’s appropriate to say the Corporation caused the
Which means that its possible that no individual is responsible; and we do
speak that way, i.e., we decry a certain corporate character, not any one
The legal means of determining corporate guilt are deficient:
‘Respondeat Superior’ only holds Corporations responsible by means of
their individual ‘rogue members’, while the ‘Model Penal Code’ is too
narrow because it requires the participation of managers.
The Corporate Character Theory – a corporation should be held liable for the
actions of its employees when those actions are a direct result of the
corporate ‘character’, i.e., the policies/rules/procedures that govern a
corporation independently of any specific manager.
There are three accepted sets of conditions under which the Corporate
Character Theory says the Corporation is to blame:
a. a policy/rule/procedure of the Corporation is illegal, and employee carries
out its requirements.
b. If a direct order from a manager is illegal, and then carried out.
c. If the Corporation ratifies/vindicates an illegal action by either ignoring
the action, or having a historical trend of committing such actions without
any explicit policy to that effect.
The ‘Corporate Character Theory’ is most useful when it comes to
determining sentences, as this is the point at which judges usually take into
account the character of the offender when it is an individual.
The ‘Guidelines’ focus on determining punishment for Corporate offenders
by analyzing 6 aspects of the Corporation’s ‘character’; all six of these
aggravating and mitigating factors correspond to the requirements of the
Corporate Character Theory.
So there is a general correspondence between when the US federal law says
a corporation should be held responsible, and the Corporate Character
Theory would offer a similar judgement.
Which means that it is, as a matter of legal fact, possible to hold a
Corporation responsible independently of holding any of the
members/agents of the Corporation responsible.