The Ambiguous Significance of Corporate Personhood

Political controversies over the place of the business corporation in American society and the appropriate objectives of corporate law have been going on for a long time. Proponents of shareholder primacy have argued that shareholder wealth maximization should guide corporate law. Critics of this position emphasize shareholder primacy's social costs and urge appropriate reforms. A standard form of argument in these debates has been to start with an assertion about the corporation's personhood. From this descriptive claim a normative result is then supposed to follow. This Essay, part of a symposium on "Competing Conceptions of Personhood", surveys the principal instances of this kind of argument in American legal history. We see that, despite its rhetorical attractiveness, the argument turns out to be indeterminate. This is because "the corporation" can be plausibly described in different ways (as an aggregation of natural persons or as a separate entity, for example). In addition, the various characterizations themselves can support opposing normative agendas. The corporate person, for example, may be seen as an individual entitled presumptively to freedom from governmental interference or as a citizen owing responsibilities to the community. Similarly, if the corporation is a mere aggregation rather than a distinctive person in its own right, opponents of regulation can characterize it as a web of private market interactions while communitarians can use that model to support law reforms based on stakeholder theories. Ultimately the relations among participants in corporate activity and between them and the state raise questions about individual responsibility, wealth distribution, and state power. I conclude that inconclusive arguments about corporate personhood fail to address these important questions forthrightly.