Start a conversation with a skeptic about the utility of corporate criminal law, and you soon come to an impasse: What could it possibly mean to punish a collective, fictional person? Good responses to this question have been hard to come by. People who believe in retribution, for example, would say that punishing criminals is a matter of giving them their just deserts. Common though retributive perspectives may be in the popular press and politics, it is far from clear what a corporation’s just deserts could be. Such justice frequently involves suffering of some kind, but suffering is not on the impressive list of things that corporations can do.
They can, however, pay fines. This is where most scholars of corporate punishment focus their attention.  Fines are supposed to work by threatening corporate economic interests, thereby deterring corporations from committing crimes. But just as corporations don’t have minds capable of suffering, they don’t have independent economic interests. Whatever “interests” they may have within legal and economic fiction are fully derivative of the interests of individual corporate stakeholders. As a consequence, when corporate fines draw on general corporate coffers, the real interests threatened are those of the corporate shareholders, employees, creditors, etc., most of whom will be totally innocent of any misconduct. In large part for this reason, corporate fines have proven ineffective at deterring corporate misconduct.
The conversation about corporate punishment need not stop at the inadequacy of suffering and fines. In a forthcoming article, Clockwork Corporations: A Character Theory of Corporate Punishment, I propose a way of thinking about corporate punishment that bypasses both. The basic idea is that coercive and potentially invasive reform should be the exclusive method of punishing criminal corporations. This “character” theory of corporate punishment offers a way to penalize corporations free of fiction and pretense.
While corporations may not have minds capable of suffering, they do have organization-level characteristics that can influence their propensity to commit crime. Organizational theorists have long recognized that such things as corporate culture, processes, procedures, and compensation metrics influence how employees behave. Those characteristics can equally affect whether employees avoid certain behavior, such as committing crimes. I propose that corporate criminals be punished solely by forcing them to reform any organizational features that encouraged, enabled, tolerated, or failed to detect misconduct by corporate insiders. To some extent, the criminal justice system already does this. Prosecutors frequently require corporations to enhance their compliance programs as a condition in deferred prosecution agreements. My proposal would require more of corporations than just improved compliance procedures, and would make such reforms the exclusive means of corporate punishment.
Even if mandatory reform can target corporations (rather than their constituents or corporate fictions), its costs, like fines, would still fall on largely innocent corporate stakeholders. Unlike fines, though, those costs would be investments in the corporation rather than payments to government coffers. They must be borne if the corporation is to operate within the bounds of the law, and the only sensible parties to bear them are the constituents of the corporation itself. Such costs are no different from those that constituents of non-criminal corporations bear to implement effective compliance programs, foster an ethical culture, or forgo potentially lucrative criminal opportunities.
Even if coerced reform directly affects corporations, is it punishment? According to one ancient tradition in criminal jurisprudence, such reform is the only justifiable way to punish. When it comes to punishing individuals, few are persuaded that character theory appropriately captures what we are trying to do. When it comes to punishing corporate criminals, though, we should ask ourselves what else we could possibly want to accomplish with these fictional people. And also perhaps whether there is any coherent alternative.
 See Immanuel Kant, Metaphysical Elements of Justice 138 (John Ladd trans., 2d ed. 1999).
 See Albert W. Alschuler, Two Ways To Think About the Punishment of Corporations, 46 Am. Crim. L. Rev. 1359, 1392 (2009) (“[A]ttributing blame to a corporation is no more sensible than attributing blame to a dagger, a fountain pen, a Chevrolet, or any other instrumentality of crime.”); Lawrence Friedman, In Defense of Corporate Criminal Liability, 23 Harv. J.L. & Pub. Pol’y 833, 845 (2000). (“So far as pure Kantian retribution is concerned, the critics of corporate criminal liability may well be correct. . . . This theory assumes a certain conception of the wrongdoer . . . .”).
 See John C. Coffee, Jr., “No Soul to Damn: No Body to Kick”: An Unscandalized Inquiry into the Problem of Corporate Punishment, 79 Mich. L. Rev. 386, 386 (1981).
 Darryl K. Brown, Street Crime, Corporate Crime, and the Contingency of Criminal Liability, 149 U. Pa. L. Rev. 1295, 1325 (2001) (“Corporate criminal law . . . operates firmly in a deterrence mode.”).
 See Cindy R. Alexander & Mark A. Cohen, The Causes of Corporate Crime: An Economic Perspective, in Prosecutors in the Boardroom: Using Criminal Law to Regulate Corporate Conduct 11, 11 (Anthony S. Barkow & Rachel E. Barkow eds., 2011) (“The threat of sanction is central to the deterrence of corporate crime . . . .”).
 See Alschuler, supra note 2, at 1367 (“This punishment is inflicted instead on human beings whose guilt remains unproven. Innocent shareholders pay the fines, and innocent employees, creditors, customers, and communities sometimes feel the pinch too.”).
 Alexander & Cohen, supra note 5, at 24 (“There is little evidence that increasing the magnitude of monetary sanctions has a deterrent effect . . . .”).
 103 Iowa L. Rev. (forthcoming 2018), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3057313.
 See, e.g., Fiona Haines, Corporate Regulation: Beyond “Punish or Persuade” 25 (1997) (“Organizational culture forms the ‘touchstone’ by which individuals behave and act.”).
 See Anthony S. Barkow & Rachel E. Barkow, Introduction to Prosecutors in the Boardroom: Using Criminal Law to Regulate Corporate Conduct 1, 3 (Anthony S. Barkow & Rachel E. Barkow eds., 2011) (Using DPAs, “prosecutors impose affirmative obligations on companies to change personnel, revamp their business practices, and adopt new models of corporate governance.”).
 See Kyron Huigens, Street Crime, Corporate Crime, and Theories of Punishment: A Response to Brown, 37 Wake Forest L. Rev. 1, 19 (2002) (“The aretaic theory of punishment takes the inculcation of sound practical judgment—virtue, in its correct, technical sense—to be the principal justifying purpose of punishment.”).
This post comes to us from Professor Mihailis E. Diamantis at the University of Iowa College of Law. It is based on his forthcoming article, “Clockwork Corporations: A Character Theory of Corporate Punishment,” available here.