Prof. Kent Greenfield

Corporate Boards and Human Life

As corporate boards make strategic decisions on behalf of a company, they often make judgments that will cost or save lives. (Consider consumer safety, worker protections, and the use of carbon fuels, to name just a few.) Sometimes these lives are saved or lost in the short term. Sometimes these lives are saved or lost far in the future. Most of the time, the lives saved or lost are not immediately identifiable, but exist as an actuarial fact.

When government regulators perform cost-benefit analyses of potential regulations, it is routine to assume some measure of the value of human life. It is also common to utilise a discount rate to measure the present value of future lives lost or gained.

The purpose of this paper is to ask whether boards of directors should, consistent with their duty of care, make explicit judgments as to the value of human life in their decision making and the discount rate used in valuing future lives lost or saved. This paper will argue that such judgments are currently not made in any organised or systematic way, and that the boards are in this respect failing to satisfy their fiduciary duties.