The Democratic Corporation: Limits and Liabilities

AuthorAllan C. Hutchinson
Pages225-245
225

e Dmocrati Coatin:
  
 corporation is an articial being, in isible, intangible, and
existing only in contempla tion of law.
~ John Marshall
L    the corporation is a distinct legal entity.
According to section () of the Canada Business Corporations Act, “a
corporation has the capacity and … the rights, powers and privileges
of a natural person.” For many democratic critics, this classication
goes to the heart of the problem. Corporations are considered to be
little more than a legal ction to hide and legitimate some ugly truths
about contemporary business and economic practices: “e corpo-
rate structure may be a necessary evil to gather the capital required
to carry on business, but the corporate structure, itself, is inherently
evil.” Although there is force to this basic criticism, I am less troubled
by this fact of legal and corporate life. As I have sought to explain
(see chapters  and ), the problems with corporate governance are
more to do with the informing context and mindset of modern busi-
ness than with the continued existence of the corporation as a sepa-
rate legal identity. is book argues that the idea and practice of the
corporation as a distinct and dynamic public organization should be
PART THRE E: MOVING FORWARD
226
used to advance the democratic agenda of closing the gap. But that
does not mean that the received understandings about what ows
from the corporation’s legal identity should be accepted holus-bolus;
rather, they need to be reworked and realigned so as to realize better
the democratic potential that presently lies hidden and suppressed.
Nevertheless, once suitably transformed, the corporation as legal per-
son holds out as much promise as peril for those committed to a more
democratic and egalitarian mode of social, economic, and political
existence. e corporation can be less the blight of a democratic soci-
ety and become, if not exclusively or single handedly, more a boon for
those seeking a more emancipatory model of Canadian society.
In pursuing this democratic agenda for corporate governance, it
will be necessary to work on several fronts. On the one hand, it will
be important to ensure that the corporation’s separate and public legal
status is strengthened in order to ensure that it becomes more than a
private vehicle for personal prot. e challenge will be to i nvigorate
the corporation as a civic site for the blending of public and private
goals so that the corporate whole can be greater tha n the sum of its in-
dividual parts; that is the idea of the corporation as communal space.
On the other hand, it will be equally important to place some denite
limits on the practical implications of treating the corporation as hav-
ing a distinct and independent legal status. A willingness to confer a
separate personality on the corporation does not mean that it can or
should be considered to have exactly the same rights and repsonsibili-
ties as other persons. e central democratic impulse is to accept that
treating persons equally is not always the same as treating them the
same. In particular, close attention will have to be paid to the dis-
turbing tendency of various members of t he corporate constituency to
hide behind the corporate form in order to evade responsibility; the
corporation must operate as an organic communit y so as to lead to an
all-round improvement, not an overall dimin ishment, in its public ac-
countability for its actions. Accordingly, in this chapter, I will develop
further the institutional changes and practical policies that might be
implemented to better achieve those ends which are conducive to an
increase in democratic empowerment.

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