Business Liberal

As many of my students know, I am a diehard business professional; therefore, I do not come by my more liberal opinions easily. For many of my students, my opinion of the Citizens United ruling by the United States Supreme Court in 2010 has been confusing. The ball is in my court to rectify this.


Our legal recognition of corporate entities as artificial persons, with the host of rights normally given to a natural person, dates back to 1816, and was based on the principles that management would be the decision making agent of the corporate entity. Management’s authority to make all decisions regarding the control of assets, on behalf of the corporation, is granted by the state government where the entity incorporates, not the shareholders. Shareholders consent applies to the control of equity, not assets.

For management, authority granted by the state comes with strings attached. These strings, known as RAA, can be defined as 1) responsibility as liability before the fact; 2) authority as the legal right to commit; and 3) accountability as liability after the fact. The relationship between the three is symbiotic. Effective delegation from state to management, from board to executive, from executive to front-line managers transfers the RAA as a package together. To manipulate the delegation by separating or limiting one element of this symbiotic relationship renders the others ineffective.

At the time the principles of corporate artificial personhood were developing, management had a long competent history. From the end of slavery in 1863 to the beginning of its involvement of World War II, the United States contributed most significantly to the establishment of management as a science and the breadth and depth of the current management body of knowledge.

Though there is little doubt that management is a professional practice as decisive as the practice of medicine and as complex as the practice of law. The business culture of the United States has failed to recognize and apply the same rigor demanded of medicine and law.

Our greatest management thinkers, including Drucker, Deming, Ackoff, Porter, Chandler, Senge, Argyris, etc. have presented differing perspectives of the same problem – the actions of a corporation are the actions of management – and the competency of management in general is growing dangerously thin. If we want corporations to be responsible and accountable, we must demand that our management be held to the same professional standards of rigor as our doctors and lawyers.