Holding corporate wrongdoing to account is a perennial issue. After all, the company itself has, in the famous apocryphal words, “no soul to damn and no body to kick”. There is a natural tendency to blame rogue individuals for bad things done in the company’s name, tacitly exculpating the company itself. At worst, there is a risk of an accountability gap, whereby the corporate form blames individuals involved and the individuals blame the corporate form. This edited collection of 20 chapters examines how best to ascertain when to hold a company to account for its wrongdoing.
This collection reflects on recent work by the editor (at times in conjunction with Jeannie Paterson, who contributes a chapter with the editor). This work has focused on creating and honing a model called “systems intentionality”. At the heart of this is that the systems created within an organisation establish and reflect whatever approximates a “state of mind” for that organisation. Bant states: “Put at its most simple, Systems Intentionality proposes that a corporation manifests (in both senses of revealing and instantiating) its states of mind through its systems of conduct, policies and practices” (p. 4). Such approach negates the need to anthropomorphise the corporate form by trying to find its “directing mind and will” or perhaps even to work out what its “state of mind is” (although various chapters in the book would disagree with this).
The policies, processes and systems of any organisation at the same time demonstrate when culpability should sit on the “corporate” side of the equation and when on the “individual” side and also establish such line going forward. Should an organisation’s processes encourage a lack of reporting or the “ostriching” of bad news or bad business practices, then it should be culpable for doing so. We do not need to find the Bad Person to hold a corporation responsible for Bad Things, if it has set itself up to encourage Bad Things then this should be sufficient. This model is intuitive (Bant states that her hairdresser called it “obvious” on p. 4), solves considerable practical and conceptual issues, and is concerned with holding companies to account.
To an extent, this is an unusual collection, because it reflects on work undertaken by the editor, who contributes three chapters to the book herself (chs. 1, 9 and 11) and a fourth co-authored (ch. 12). In less deft hands, this could seem indulgent. Here, though, each chapter goes deeper than the last. Bant’s first two chapters set the scene for the model and her third delves further into detail, connecting the model to notions of intention, recklessness, knowledge, negligence, dishonesty and unconscionability. The book excavates deeper topics in line with the reader’s developing understanding of the topic as the book progresses.
It is in four parts. The first is entitled “Framework and Contexts” and sets out the basic issues arising. In Chapter 1, Bant sets out an important “Taxonomy and Synthesis” of the issues discussed in the book. In Chapter 2, Matthew Harding discusses the important issues of the responsibility of associations. Given that these concepts underpin the conceptual basis of the book, this chapter is a vital cornerstone in the work. In Chapter 3, Penny Crofts takes these conceptions into a “realist” notion of the company – that the company is something autonomous, real and distinct from its members and applies it to criminal law and a particular Australian case study – that of Crown Resorts. In Chapter 4, Joshua Getzler views problems of corporate torts through the lens of history, connecting limited liability, corporate capacity (especially ultra vires angles) and tort law in a way which a corporate legal historian cannot fail but find fascinating. In Chapter 5, Julia Powles moves the discussion on to “Big Tech” and argues that focusing on the systems of big tech can help hold them to account for social harms.
The second part explores models of attribution – how, exactly, do we attribute actions to a corporate form? In Chapter 6, Rachel Leow outlines three models, comparing the traditional common law understanding to an alternative approach she has previously argued for (focusing on the allocation of powers) and systems intentionality. In Chapter 7, Brent Fisse explains his concept of “reactive corporate fault”, the notion that criminality should apply when a company fails to stop it (a variation on recent legislative trends towards “failure to prevent” offences). In Chapter 8, Rebecca Faugno finds links between corporate culture and the jurisprudence developing under Australian law in respect of penalties. Chapter 9 is Bant’s first return to the substance of systems intentionality. Here, she unpacks systems, patterns, practices and policies, and connects these to procedural and Australian evidential rules, making the general notions of the theory more concrete. In Chapter 10, Mihailis Diamantis explores how we look for a corporate mind and whether we should do so. He concludes that we should and the focus should be on how we do so. This chapter draws on external fields, primarily psychology, to explore the issue.
The third part moves into corporate minds themselves, starting with Bant’s third and final solo contribution which, as noted above, in Chapter 11 provides a deeper discussion of how, exactly, systems intentionality can model a corporate state of mind. In Chapter 12, Bant joins with Jeannie Paterson to connect together the private law doctrines of unilateral mistake and unconscionable conduct with algorithmic contracting. By advancing the notion that algorithmic contracting is, itself, subject to systems intentionality, the authors provide a roadmap for pushing the boundaries of the theory beyond the corporate/business space. In Chapter 13, Jeremy Gans uses the lens of a 2010 Australian fishing case to ascertain difficulties in holding companies to have acted dishonestly. The in-depth case study shows doctrinal challenges in meeting “dishonesty” and is an interesting illustration of the wider themes at play within the book. Chapter 14 sees Michael Bryan look at asset-based lending, in which finance is advanced against specific asset (be it a car, an invoice or something else). This can cause issues in respect of lending to consumers. In Chapter 15, Robyn Carroll provides an interesting discussion of whether companies can, actually, show remorse or contrition for past wrongs, an important function of penalties in criminal and private law actions.
The fourth and final part is called “Alternative Approaches”. In Chapter 16, Sarah Derrington and Samuel Walpole see how these notions play out in shipping. Ships are compared to corporations and ships owned by corporations are also discussed. In Chapter 17, Pamela Hanrahan explores the extent to which executives should be held accountable for corporate wrongdoings. In Chapter 18, Jonathan Clough explores the trends of increasing “failure to prevent” offences, specifically in a transnational context. In Chapter 19, Lauren Willis explores the deployment of AI in respect of retail investors, in particular with performance based protection. In the final Chapter 20, Fiona McGaughey explores UK and Australian approaches to modern slavery laws.
Each chapter advances its own interesting thesis that, in aggregate, provide an important verification of Bant’s overall methods and scope. The collection as a whole, and each individual chapter, will be important reference reading on the tricky interface between the corporate form and wrongdoing, and I imagine many chapters will be the basis for ongoing research. There are three areas in which this reviewer would like to see the ideas in this book developed in the future. First, in geographical scope. Whilst the contributors to this volume reflect excellent gender balance, 16 of the 19 are based in Australia. This in no way undermines its international appeal and concepts raised are likely to be relevant for most jurisdictions, especially those in the common law world. However, there were times when the contributions could benefit from going the extra small step and identifying wider considerations beyond those specific to Australian doctrine.
Second, it mostly takes as axiomatic that the corporate form is synonymous with an organisation. There is an assumption that the company in question is a large organisation, with the focus being how to understand such large organisation. For a lot of large companies, especially multinational corporations and those that are publicly listed, this is likely to be the case. These companies may even have the largest social and economic footprint of all types of companies. However, more clarity would be helpful in understanding how the model applies to corporate forms that do not follow this corporate type. We know that most companies (by number) are quite small. Do any adjustments need to be made for close companies generally? How about for family companies? We know that large companies frequently set up subsidiary companies. It has been argued that such subsidiaries allow the strategic partitioning of liabilities and encourage risk in the corporate form. Groups, parents and subsidiaries are occasionally mentioned, but not systematically. Yet the same accountability gaps that create issues as between the individual and the entity also apply as between entities within a corporate group. It would be helpful to understand more how these concepts play out in the context of groups and supply chains. Similarly, corporate law always struggles with the “single person” company, in which one individual is sole director, shareholder, employee and various other capacities. Clarity as to how we assess systems in such a context would be helpful. There is also space to explore the extent to which “single purpose vehicles”, or SPVs, fit into or alter the model. None of which is to criticise the excellent work done in this volume, but instead to highlight that there are other directions in which this work can continue.
Third, and the inverse of the above, themes are stated as being corporate that have wider application than merely the corporate form. Large amounts of the first and second parts apply equally to any group endeavour. Most analysis in the third and fourth parts could apply equally to any business form. There is nothing particularly “corporate” about the core of a number of the ideas, other than the fact that they often play out in companies. As a result, a reader will not learn much about the corporation per se from reading the volume. Once more, this is not a criticism – the book does not set out to do so. Yet it does open up space for interesting extensions. The book starts from a particular conception of the corporate form – referred to throughout as the realist conception – of the nature of the company. Under such approach, the company is seen as more than the mere sum of its parts. Other conceptual approaches are available and corporate law discourse increasingly explores their potential application. There is an interesting extension available to reflect on what the analysis deployed tells us about the nature of the company. Relaxing this first assumption can help provide additional insights into the corporate form. Providing such a reflection on the base underpinnings of the analysis can only enrich the subject.
Overall, then, this book provides important conceptualisation in a key crossover area between company law, private law and criminal law in which more problems have been identified then helpful solutions. It is premature to say that systems intentionality solves all problems in the field. This edited collection, supplementing as it does Professor Bant’s existing writings on the subject, is a very good start.
