Corporate personhood has a long-standing basis in law. Indeed, the idea that the corporation is a separate legal entity from the people who own it and work there is the foundation of corporate law. Companies don't automatically get the same rights as people (because they aren't people), but it starts them along a metaphorical pathway.
The idea became very divisive following a Supreme Court ruling, ironically called Citizens United, which sought to remove caps on individual political contributions, and corporations argued similar protections.
The idea that corporations are 'people' is the core idea of modern branding, based on an insight Stephen King gleaned during focus groups for detergents. Humans anthropomorphise everything, including brands, appending personality traits to inanimate objects. King leveraged this observation into one of the great insights in advertising: the brand construct can function like a personality construct; people like different constructs for arbitrary reasons, and; this is malleable through advertising. So psychological attributes were built into brands and briefs.
In the 1960s, companies still understood that they had social roles and responsibilities. Even earlier, companies such as Cadbury and Rowntree were started by Quaker families explicitly to do well by doing good. They set up schools and published groundbreaking papers on poverty. Companies were part of communities. Then, an idea began to change how corporations thought of themselves. This was 'maximising shareholder value' – recently dubbed 'the dumbest idea in the world' in Forbes. Its analogue was made famous by Milton Friedman in 1970, in his New York Times article 'The social responsibility of business is to increase its profit'. This short article somehow became the guiding principle of all corporations, despite being a "pernicious" ideology that "has no foundation in history or in law", according to Steven Pearlstein in The Washington Post.
So, at almost the same time that we understood that people naturally thought of products and companies as 'people' – and leveraged that insight to create communications – the behaviour of companies began to change. They decided that the only thing that mattered was achieving financial goals for shareholders. They ignore negative externalities incurred by the environment as much as possible for the sake of the bottom line. They demonstrate a grandiose sense of self-worth, especially in their communications. They are unwilling to accept responsibility for their actions, preferring endless litigation and fines that accept no fault. They demonstrate poor behavioural control and criminal behaviour, especially in the banking sector. They overweight short-term gain and show a lack of empathy. All in pursuit of the goal of shareholder value.
Now, if corporations are people, they seem to fit neatly into a certain diagnosis. Here are some of the criteria used to make this diagnosis: glibness/superficial charm; grandiose sense of self-worth; pathological lying; conning/manipulative behaviour; lack of remorse or guilt; lack of empathy; poor behavioural controls; lack of realistic longterm goals; failure to accept responsibility for actions; and irresponsibility. We call people who act this way psychopaths – the above criteria are 10 of the 20 listed on The Psychopath Test. Psychopaths cannot be trusted. This is manifested in the decline in trust that we have for corporations.
Does this matter? Yes, because all the higher-order values brands can create for products are dependent on them not creeping us out. Helping rehabilitate the corporate psychopath is a great role for agencies, and less so for the accountants and Accentures. Agencies are comfortable emotional territories and the others aren't well placed to move into it.
Empathy, for employees, customers, and culture must be delivered in how the company acts – how it files taxes, how it treats workers, how it communicates – in order to rebuild trust in brands as part of society. The rise of socially conscious brands and ideas can be seen as a backlash against this corporate psychopathy. TOMS, Warby Parker, Patagonia seem like new kinds of corporations that care about more than just the bottom line. Acting with empathy is a requirement for being a normal 'person'.
So, rather than decrying corporate personhood, we should help them live more fully up to that metaphor. Give your brand The Psychopath Test, and start the therapy.
More from Warc:
What is a brand?
Stephen King, JWT, 1976
In pursuit of brand purpose
Liz Tinlin, Market Leader, 2014
What we know about building brands
Warc Exclusive, February 2015
How brands benefit from having a purpose
Chuck Kapelke, ANA Magazine, 2013
Authentic Brands: From transparency to full disclosure
Louise Fernley with Geoff Beattie, WPP Atticus Awards, 2013
For more see Warc's Sustainability and CSR Topic Page