Deardorff on Isiksel, “Decider of the Corporate Purpose”

In the final meeting of the Sawyer Seminar on Corporations and International Law at Duke University on April 13, 2018, Turkuler Isiksel, the James P. Shenton Assistant Professor of the Core Curriculum at Columbia University, spoke to the Seminar on her work on corporations and human rights. Isiksel’s work stems from her initial interest in pursuing her Ph.D. with regards to the European Union. When she began her research, she discovered that the European Union operated in a more functional, rather than cosmopolitan, manner, operating around the initially economic goals of the supranational organization. Looking at the way the European Union treats corporations led Isiksel to look at corporations and human rights.

Both papers Isiksel spoke about deal with an extension of this interest, specifically the predominately dyadic model of corporate rights in modern discourse, where viewpoints are split between “corporations do not have rights” and “corporations have the same rights as human beings.” Isiksel calls this the “de-humanization” of human rights because the rights granted to corporations in the past few years by the Supreme Court of the United States and the European Court of Human Rights are distinctly human entitlements, such as freedom of religion and equal protection.

Isiksel’s discussion neatly wrapped up many conversations the Seminar has had over the course of the past year. Instead of using a collective theory, Isiksel uses a purposive approach to the corporation, which fuels her argument. In the purposive approach, corporations are legal entities created specifically for a purpose. As they are not simply groups of human beings collected together, corporations do not intrinsically have rights – they do not have the rights of the people who form the corporation, they only have the rights the government under which it was incorporated grants it. To avoid the issues that may arise if corporations are given the full spectrum of human rights, Isiksel suggests using the corporation’s purpose to determine what rights are granted to it.

But what is a corporations purpose? Of course, benefit corporations have listed purposes, but most corporations’ incorporation documents say that the corporations are incorporated “for any lawful purpose.” To avoid assigning corporations more rights than they should have, Iskisel suggests looking beyond the incorporation documents. Purpose doesn’t have to be listed in the charter; there are other places to find it, such as corporate culture, home community of the corporation, product, what it invests in, et cetra.

The next question is how narrowly we define the purpose of a corporation. Iskisel proposes adopting a very black-and-white, high level view of purpose in order to streamline the process: religious organization, non-profit, for-profit, et cetra. Of course, this is simply the economic purpose. The social purpose must be deemed to be permissible by the government under which the corporation is incorporated: while big pharma is a permissible social purpose in the United States, a drug dealer’s operation is not.

The remaining question from Iskisel’s proposal and presentation is who decides what the purpose of a corporation is? Of course, most with a legal education know what purpose is subjective and reasonable minds can often differ as to what the purpose of something is. Would the legal system decide? Would a jury of the corporation’s “peers” decide? Would there be a special administrative committee? Before Iskisel’s (very valid and well thought-out) proposal can go forward, this question needs to be addressed to alleviate potential burdens on the already overworked judiciary.

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