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Responsibility in Business and Enterprise
Responsibility is far from being an alien concept in the world of business and enterprise. From a variety of legal responsibilities (such as blame and liability) to corporate social responsibility (CSR) via the notion of accountability, the field of corporate responsibility is already well populated and thoroughly analyzed.
However, these different types of responsibility are not always clearly articulated. A large volume of literature exists concerning the legal and social responsibility of companies, but synthetic perspectives, connecting normative, legal, economic and empirical reflection, are rare. Pavie et al. [PAV 14, p. 14] identified four levels of corporate responsibility: the internal chain of responsibility (between directors and employees, for example), the responsibility emanating from the status of the moral entity (such as the obligation to pay taxes), responsibility that arises from interactions with other partners (suppliers) and a responsibility to future generations. However, this analysis does not go into detail considering the different natures of these levels of responsibility (notably moral and legal). Furthermore, no justification is provided to legitimize responsibility toward suppliers or future generations, which is, as we shall see, far from evident.
In this chapter, we shall organize and connect the different aspects of responsibility encountered within a framework of economic interactions. Rather than opposing or simply juxtaposing legal and social responsibility, for example, our aim is to highlight the connections and complementary elements found in different interpretations of responsibility, seen within the specific framework of the company. To do this, we shall begin by briefly discussing the work carried out in a previous volume in this series on responsible research and innovation [PEL 16b] which analyzed 10 differentt understandings of responsibility. Here, these interpretations will be rapidly examined in order to specify their implications within the specific corporate context (section 1.1). Building on this typology, the remainder of the chapter is split into three parts, which focus on the legal specificities of responsibility, organizational responsibilities associated with the operation of a company and, finally, the specifically ethical element of responsibility.
In section 1.2, we shall examine a number of important aspects of legal responsibility for corporations and their representatives, as defined in the applicable laws. We shall then briefly consider the types of responsibility that arise from the organizational character of the enterprise, with its origins in the attribution of specific functions, for example as stipulated in a contract (section 2.3). Finally, we shall provide a detailed analysis of the way in which the literature on CSR distinguishes between different levels of responsibility (economic, legal, normative or “social”) and organizes these levels in relation to each other. More specifically, we shall analyze the way in which demands originating from a society result in an “ethical” form of responsibility, different from the legal form and economic constraints, and the way in which these different dimensions are articulated.
1.1. Different notions of responsibility
In a previous volume, working alongside Bernard Reber [PEL 15, PEL 16b, PEL 16c], we analyzed at least 10 different meanings of responsibility encountered in a variety of works on moral philosophy [HAR 68, GOO 86, BOV 98, DUF 07, CAN 02, WIL 08, VIN 09, VIN 11, VAN 11, GOO 83] and recent literature on Responsible Research and Innovation (RRI) [OWE 12, OWE 13b, GRI 13] or CSR [GOO 83]. According to this typology, responsibility may be understood as:
- 1) cause: for example, drought is responsible for poor harvests and a reduction in the turnover of farmers. The drought is the cause;
- 2) moral or legal blameworthiness1: for example, manager X is responsible for lying about the real quality of an airplane braking system, and is blamed;
- 3) liability: for example, company Y sold a defective product, and is thus responsible for Z’s accident, and must compensate accordingly;
- 4a) and 4b) accountability: for example, the director of company K is answerable to the company’s stakeholders, and must justify his or her actions and their consequences;
- 5) task or role: for example, the postman is responsible for distributing mail. This is his assigned task;
- 6) authority: for example, the product manager is responsible for a product from creation to launch and has the authority to make decisions;
- 7) capacity: for example, Mr. Y has the cognitive and moral capacities to act in a responsible manner;
- 8) obligation: for example, a human resources director is responsible for his or her employees, and has a moral obligation to ensure their wellbeing2;
- 9) capacity to respond: for example, Ms. Z has the capacity to respond to an issue in an adequate, prompt and accurate manner;
- 10) care (virtue): for example, Mr. K has the disposition to act in a responsible way.
This general typology allows us to characterize and articulate the different types of responsibility involved in economic relations. Before going into detail with regard to these notions, we must consider the case of responsibility as cause (1)3. It underpins the establishment of responsibility in terms of blameworthiness or liability: an individual who is declared to be responsible and obliged to provide compensation must be identified as the cause of the harmful event. However, it is less essential when considering responsibility in terms of a capacity to react or as a virtue, as the causality connection between actions and condemnable events is considerably weaker. In any case, responsibility as a cause is never sufficient in and of itself to take account of the normative dimension running through the legal and moral concepts considered here. The following sections will thus focus on the latter elements.
1.2. Legal responsibility
The first aspect widely encountered in the domain of corporate responsibility corresponds to the legal dimension of the notion, which, in our typology, relates to responsibility in terms of blameworthiness (2) and liability (3)4.
These two notions can be found in a vast quantity of literature, which describes and analyzes the various legal statuses that may be adopted by commercial societies, along with their accompanying regimes of responsibility. Our intention here is not to go into detail concerning the social and legal forms of companies, but rather to highlight the ways in which the legal responsibility of an entity such as a company or society5 (in terms of the legal framework for a company) may be defined and applied in relation to other notions.
Generally speaking, building on the fundamental distinction in most legal systems between civil and criminal law, a distinction may be made between two types of legal responsibility for moral or physical persons: civil responsibility and criminal responsibility.
1.2.1. Civil liability of companies and directors
Civil liability, or responsibility, is the obligation to make reparation for damages caused to another entity. It may concern physical persons (individuals) or moral entities (such as companies or associations). In the latter case, a company may incur civil liability in cases of damage or prejudice caused to a third party, in which case compensation may be due to the victim in the form of damages. In French law6, a distinction is made between two forms of civil liability. The first form is contractual liability, which is “the requirement for the debtor of an obligation resulting from a contract to make reparation for damages caused to the creditor following non-fulfillment of an obligation imputable to the debtor” [DEE 95, p. 422]. This form of liability comes into play, for example, in the case of damages resulting from the non-completion or delayed completion of a contract (sudden breach of a contract made with a supplier, delays in product delivery or poor execution of the work).
The second form is tort liability, which denotes the obligation to make reparation for damage caused to a third party, whether or not a contract is involved. It may apply to a physical person (the director of the company, or any other person to whom power has been delegated), or to a moral entity (the company). This form of liability comes into play in the case of counterfeiting, for example, or unfair competition practices.
Three conditions are necessary for a person (moral or physical) to be held civilly liable: the existence of damages or prejudice, the existence of fault (voluntary or otherwise) and a causality connection between the fault and the damage. This form of responsibility combines the notion of sanctions (and thus of blame, in connection with the existence of a fault) with the obligation to make reparation for damages7.
Finally, whilst civil liability mostly applies to companies (for example in cases of contractual responsibility), it may also concern a physical person (such as a company director) when, for example, damage results from voluntary deceit on the part of a supplier that can be traced back to one or more identified persons.
1.2.2. Criminal liability of physical and moral persons
Criminal liability, as opposed to civil liability, comes into play in cases where a legal violation can be identified, rather than a fault. Since 1994, French law also offers the possibility for a moral person, i.e. a company or association, to be held criminally liable.
Thus, according to article 121-2 of the Code Pénal, “Moral persons, with the exception of the State, are criminally liable, according to the distinctions set out in articles 121-4 to 121-7, for violations committed on their behalf, by their agencies or by their representatives”.
The attribution of criminal liability to a moral entity can be problematic, as a company or association does not have its own “will”, and is also independent from its directors [BOU 97, p. 78]8. However, this mechanism has been used in an attempt to limit the immunity of moral persons (companies or associations) in cases of serious environmental impacts (such as the Erika disaster9), public health (such as the recent Mediator scandal10), public economic order, or social legislation (illegal employment).
A moral entity may be held criminally liable and subject to a variety of sanctions for different types of infractions: manslaughter or involuntary bodily harm (for example in the case of accidents at work), violations of human dignity, in cases of damage to property as stipulated in the criminal law codes (theft, concealment, extortion), crimes against the nation (espionage, terrorism, active corruption and influence trafficking), alongside a number of more specific cases, such as illegal employment or the production of counterfeit goods.
In cases of a proven violation, sanctions, applied according to the seriousness of the crime, should be seen as a punishment rather than an attempt at reparation. It is thus possible to combine both civil and criminal responsibility: the tortious civil liability of the directors or of the company may also be invoked by the victim or their successors in ord...
