Theology and the incorporated company
Stephen F Copp (2011) argues that the limited liability company is not merely acceptable according to Biblical principles but actually implements Christian theology, insofar as it enables prosperity, allows people to flourish and “reflects the character of God in reconciling ideas of law and grace.” He explains that the idea of limited liability is not merely a legal device that allows a company to shrug off its obligations regarding debt. He has five main arguments why limited liability companies can be regarded as an embodiment of Christian theology:
- Incorporation supports the biblical ideal of a prosperous and free society.
- Incorporation reflects the biblical ideal for relationships.
- The recognition of corporations is required to limit government.
- Limited liability enables risk to be addressed, consistent with biblical prudence.
- Non-payment of debt is not necessarily sinful.
The author argues that companies can be seen as the Biblical idea of incorporation translated into a secular context. He cites as evidence the etymology of the word company from Latin cum panis, the breaking of bread together.
“The church is vividly portrayed in the New Testament as Christ’s body.
The context was the need to avoid damaging divisions in the church between those with different charismatic gifts by emphasizing their mutual interdependence. Yet, in doing so, it provides an ideal for cooperative human relationships and, therefore, business organization. Key features of this ideal are the recognition of free will and/or inclusiveness (choice replaces birth as the nexus between members), specialization and/or interdependence (each member provides different but important functions), complexity and/or size (the body is a highly complex, not simple, organism), and central direction (the Holy Spirit).”
James M. Childs (1995) considers the gulf between churches and the world of work, which has been created by both sectors. Both church and business stereotype each other, businesses castigated as unethical and greedy, churches dismissed as being out of touch with the real world. And yet he finds evidence that the divide can be bridged to beneficial effect through Christian-inspired management policies. Childs refers to an anonymous ‘Christian businessman’ who had a large business employing many young people. As a Christian, his principles involved not taking a short-term personal profit but investing in the business, because that would expand opportunities for more than just himself. A second anonymous story makes a clear point about the dilution of Christian ethics in an organisation following a takeover. He talks about a company founded by a Christian entrepreneur, whose faith legacy disappeared following a change of ownership for three reasons: the company ethos was diluted as the influence of the founder faded, the takeover process of buying and selling inescapably put the focus on short-term profits, and the transaction itself undermined employee loyalty. Childs’ conclusions seem valid when compared with numerous Christian business foundations described in this research that have lost their religious ethos following a change of ownership. They also highlight one of the questions raised by this field: how far can Christianity be endemic to any company’s management if the religious accent cannot survive a change of ownership?