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What is Corporate Citizenship?

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  • Written By: Jessica Ellis
  • Edited By: Bronwyn Harris
  • Last Modified Date: 13 November 2016
  • Copyright Protected:
    2003-2016
    Conjecture Corporation
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Corporate citizenship can have several distinct meanings. Oftentimes, it refers to theories that suggest that corporations and businesses should have a measure of social responsibility, given their access to assets, manpower, and influence over the community. Corporate citizenship can also refer to the legal status and legal rights granted to a corporation. How each of these issues is viewed depends on the understanding and interpretation of a corporation's role in society.

In terms of social responsibility, corporate citizenship is an important issue facing businesses today. The idea of corporate philanthropy is often attributed to the business leaders of the Industrial Revolution, who frequently embraced the idea of directing a portion of their wealth toward the good of the public. Opening libraries and funding orphanages is only a part of the social concept of corporate citizenship, however; some suggest that it is the responsibility of a corporation to do no harm through its operations.

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Private sector businesses such as corporations are typically motivated by profit, rather than altruistic aims. Unfortunately, if the ultimate goal of a company is the highest profit margin possible, issues such as sustainable resourcing, labor, and safety standards may be disregarded or reduced in order to increase profits. The idea of corporate citizenship suggests that using slave or sweatshop labor, engaging in environmentally destructive processes, and ignoring emissions standards is morally and socially reprehensible. Moreover, some argue that acting as a good corporate citizen is good business, as it helps promote a sustainable, safe environment in which a company can theoretically operate forever without running out of resources or damaging the environment beyond livable conditions.

The legal concept of corporate citizenship varies between different jurisdictions and social theories. In some countries, a corporation has separate legal status from its owners; it requires its own tax return, for instance, and can be sued by a member of the public as a corporation. Some argue, therefore, that corporations are given the responsibilities of citizenship without the rights that pertain to individual citizens.

In a landmark 2010 decision by the United States Supreme Court, the Court ruled that corporations have free speech protection under the First Amendment of the US Constitutions, thus the use of corporate funding for political ads cannot be limited. This controversial decision is widely seen as a victory for corporations, while critics suggest that the ruling equates money with speech, thereby undermining the importance of campaign contributions from individuals. If a corporation with vast resources can use as much of this funding as desired to pay for political ads, critics fear the decision will drive candidates to seek the approval of corporate citizens rather than individuals.

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