William & Mary Business Law Review, 2010
23 Pages Posted: 6 Dec 2009 Last revised: 9 Feb 2010
Date Written: 2009
This Essay begins with Max Weber’s observation that the condition of the modern world is “disenchanted” and goes on to argue that contesting the notion of disenchantment offers a promising framework for rethinking baseline issues in corporate law and corporate life more generally. After elaborating what disenchantment meant to Weber, this Essay offers two counter-observations. First, the world may not be better off as a result of disenchantment. Second, as an empirical matter the world may not really be “disenchanted” given the substantial number of people who both hold religious beliefs and consistently report that those beliefs influence how they live.
Linking these observations to corporate law, the Essay notes that the field of corporate law has been examined from many disciplinary vantage points, including neoclassical and behavioral economics, sociology, history, feminism, and others, but only rarely from the perspective of religious belief. The Essay argues that corporate law scholars should probe the implications for contemporary, highly individualistic theories of corporateness if, in fact, significant numbers of people in the business world - including executives, directors, investors, and employees – remain “enchanted” by religious faith. The issue is not whether people should or should not have such beliefs. What matters is whether, and how, as an empirical matter, various beliefs actually influence, or potentially might influence, behavior in the business arena. Do we really know? Or do we simply make assumptions about human decisionmaking that may be unwarranted. An example is the simplistic assertion that people largely behave in a self-serving fashion. That premise of neoclassical economics is coming under attack from many scholarly quarters. It seems especially suspect when describing people with strong religious convictions. This Essay advocates a more behaviorally realistic understanding of corporate relations.
The Essay then develops a number of ways in which religious conviction can positively influence corporate life and theory, whether one wishes simply to understand the corporation or also seeks to reform its conduct. It challenges the simplistic typology of “profit” and “not for profit” organizations, arguing instead for a more pluralistic approach to corporate objectives than the current either/or approach to profit pursuit. To demonstrate that there is space for the influence of religious beliefs in shaping management conduct, the Essay dispels the common notion that shareholder wealth must, legally, be maximized. Beliefs about institutional objectives stem not from law but from markets, social norms and business lore, all of which are malleable. The Essay also contends that introducing religious faith into corporate discourse opens the way to reform unhealthy business practices from within the private sector itself, without relying solely on government regulation as the agent of reform.
The overall aim of the Essay is to invite exploration of how the seemingly disparate discourses of religious faith and business enterprises can be examined together. Much religious legal theory addresses the interplay between the individual and the state, while ignoring those intermediary institutions that, while “private,” nonetheless wield vast social influence. The corporation is one such institution.
Keywords: corporate law, business associations, corporations, law and religion
Suggested Citation: Suggested Citation
Johnson, Lyman, Re-Enchanting the Corporation (2009). William & Mary Business Law Review, 2010; University of St. Thomas Legal Studies Research Paper No. 09-29. Available at SSRN: https://ssrn.com/abstract=1519103