Linking Corporate Power to Corporate Structures: An Empirical Analysis
Corporate law; limited liability; asbestos compensation; off shoring; tort creditors; corporate power; transnational corporations
Social & Legal Studies
Corporations are contested legal entities. Many see them merely as vehicles for financial and business elites to acquire and maintain unfettered power. In this paper, I look at the relationship between corporate power and corporate structures, and argue that corporate power is importantly located in the exploitation of the principles of separate personality of corporate entities and shareholder limited liability. Courts’ unwillingness to pierce the corporate veil and to extend the liability of parent company/principal to the acts of a subsidiary/agent contributes to enabling the creation and exploitation of corporate networks. This is particularly problematic when the corporate creditors are tort victims, who do not assent to limited liability through voluntary transactions. The argument is supported by empirical evidence of the strategies of three asbestos firms to avoid accountability for their tortious conduct. These strategies were curbed only by recourse to criminal law by holding corporate personnel directly responsible for their corporate activities in question and by boycott and political mobilization.