Through the rapid modern growth of private security as a form of “internal” policing, and the preference of many large organizations for handling problems “internally” which might previously have been dealt with through the public criminal justice system, both the content and quality of “justice” in Western societies is being radically transformed. Corporate justice is beginning to supersede state justice as the preferred means of resolving disputes, maintaining order and effecting social control. Reflecting on 10 years of research into the growth of private security and its implications in this regard, the authors illustrate how corporate justice, while posing important problems for civil liberties, provides some interesting and innovative approaches to solving problems which have long been unsatisfactorily dealt with by the institutions of public criminal justice.

The twentieth-century thinker, Ivan Illich, has drawn attention to the modern tendency of ideas and values to become appropriated by institutions. He argues that this “institutionalisation of values” has led to a distortion and impoverishment both of the values themselves and of the social world in which they operate. Thus, “education” has been reduced to mean what goes on in schools, “health” as what the medical profession dispenses etc. In this way, functions which are vital for individual and social survival and development have been removed from the grasp of ordinary people, and have become the property of professionals and “experts”, establishing a self-perpetuating and dangerously destructive dependency.

As criminologists, we can not only recognize that the value of “justice” has similarly been appropriated in this way but, if we are honest, we can also recognize our own part in contributing to and legitimating this theft. In the discourse both of law and criminology, “justice” is a term which has all too commonly come to be identified with what the police, the courts, the correctional authorities etc do. Thus we refer to this collection of State institutions as the “criminal justice system” , even while we rail against the injustices which it perpetrates.

Used in this sense, the term “justice” has come to refer not to whether things are just or unjust, but simply to the activities and processes of these State institutions in dealing with the “troubles” which come to their attention. It is in this sense — the institutionalized sense — that we use the term “justice” in this paper, in speaking of “corporate justice”. By “corporate justice” , then, we mean no more nor less than the things corporate bodies do in responding to “troubles” which come to their attention. It will be evident, that in referring to such activities and processes as “corporate justice” we are not to be taken as implying that they are (or are not) just in any abstract sense.

Describing such activities and processes as “corporate justice” is probably no more appropriate than describing the activities and processes of certain State legal institutions as “criminal justice”. We have adopted this terminology, however, because it is a central argument of our paper that through their own private institutions of corporate justice, corporate bodies in Western capitalist societies are increasingly assuming — perhaps resuming would be a more appropriate word — responsibility for, and control over, matters which, as criminologists, we have come to think of as falling within the domain of State legal (and particularly criminal justice) institutions — specifically, the matters of crime control, order maintenance, dispute resolution and sanctioning.

What this amounts to, we shall argue, is the gradual re-definition of both the form and the substance of “justice”, and its repossession from the State by private interests which, for the most part, are corporate interests. In a capitalist economy, this means no less than the assumption by capital itself of direct responsibility for, and control over, the processes of social control and order maintenance. Such a trend, of course, raises fundamental questions about the role of the State, and its relationship to capital, in modern capitalist societies.

For reasons which we hope will become obvious as the paper proceeds, it is difficult to give any a priori definition of “corporate justice” which would be satisfactory. Let us start, then, with a simple iHustration, and proceed from there.

Last year, in the city of Calgary in Canada, a customer of one of the major banks succeeded in relieving its automatic cash — dispensing machines of $14,500 to which he had no legal entitlement. The aspiring thief, however, did not reckon on the sophistication of the security equipment installed to protect the bank's assets; unbeknown to him, a hidden camera had snapped an excellent full-face picture of him just as he was perpetrating his crime. This photograph, combined with the computerized records generated by the machine itself, left no doubt that he was responsible for the loss. The response of the bank to this serious theft provides an illustration of what we mean by “corporate justice”. Instead of immediately invoking the processes of criminal justice (calling in the police, having the man arrested and charged, getting a search warrant to recover the money etc) the bank made contact with the man and arranged for its representative to meet with him. At this meeting, the bank official let it be known that the bank was aware that the man had “borrowed” its money, and suggested that perhaps this “loan” should be placed on a more regular footing through a formal loan agreement. The official offered a rate of interest and a repayment period which, while not overly generous, were certainly not unreasonable given the prevailing economic conditions at the time and the man's own crieditworthiness in the circumstances.

Had the customer accepted this offer, we doubtless would never have heard anything about this incident at all, and neither would the police. The bank would presumably now be collecting the interest on the loan, and the would-be thief would have remained a customer of the bank who, if not thoroughly satisfied, might at least have considered himself as having got a lucky break. Corporate justice would have been done.

As it was, the man refused the bank's offer, and the bank, having presumably concluded that he did not have sufficient business acumen to be a good prospect as a customer, turned him over to the police. He was charged, prosecuted, convicted and sent to gaol. Probably he is hoping to collect the $14,500, without interest, when he gets out. In the end, then, criminal justice was done in this case. The judge had some unflattering things to say about the bank as a corporate citizen, which is why the case was reported in the press.

This case, which would come as no surprise to anyone who has studied the way banks or other corporations deal with corporate losses through internal or external theft, illustrates a number of the most salient features of “corporate justice” and how it differs from state legal “justice”. First and foremost, it illustrates that unlike criminal justice, corporate justice is quintessentially victim-oriented and instrumental in character. Rules are established and enforced, prevention and detection strategies are adopted, dispute resolution structures and processes are employed, and sanctions are imposed, not as a moral exercise to uphold abstract principles of justice and right, but because they will be instrumental in furthering the particular interests of the corporation. Usually, the interests of the corporate vistim are in making a profit. This is not always the case, however; institutions such as universities, hospitals, libraries, museums, religious and recreational institutions, housing estates and condominium corporations will often have other corporate interests which may be paramount in influencing the nature of the corporate justice they dispense in dealing with troubles internally. Most corporations which have the resources to establish sophisticated private justice systems, however, are in the business of making profit, and this means that corporate justice is most commonly justice for profit.

From this perspective, of course, the response of the Calgary bank in seeking to convert a theft into a loan can be seen as an entirely rational and instrumental one. Making a profit from the borrowing, lending and safekeeping of money and valuables is, after all, what banks are all about. Their primary interest in dealing with losses, then, is not in making moral statements about theft, or in punishing thieves, but in maximizing their profits. This is not to say that banks are immoral, but merely to recognize that their role in our society is not that of judges or priests.

The fact that corporate justice systems tend to be so victim-oriented and instrumental, of course, has important implications. In particular, it means that they will rarely, if ever, adopt processes which are not perceived as being in the corporate interest. Thus, while they may often be highly effective (and even desirable) in dealing with wrongs committed against the corporation, they may also be employed to cover up or prevent the redress of wrongs committed by the corporation. (In passing, we may note that exactly the same observation may be made about the relationship between criminal justice systems and the state. It reflects no more than the recognition that justice systems of any kind tend to operate in the interests of those who establish and control them.)

Another aspect of the victim-oriented, instrumental character of corporate justice, is the way it determines the scope of justice. For private corporate justice embraces a range of matters which is both broader and narrower than the range of matters embraced by criminal justice systems. Since the interests of corporations are usually concerned with the making of profit, corporate justice systems are invoked to deal with any corporate “troubles” which threaten profit — those include not only crimes against the corporation (such as theft, fraud, embrezzlement, sabotage, vandalism, threats to management or workers etc), but also any other potential source of serious loss — thus, in addition to concerning themselves with crime control, corporate justice systems are invoked to deal with such problems as absenteeism, alcoholism, false benefits claims, the passing of company secrets, health and safety hazards in the workplace, etc etc. Traditional divisions of legal justice (civil/criminal etc) are thus often not recognizable within corporate justice systems. It will be apparent that this focus on loss rather than just crime means that the “problem populations” of interest to corporate justice tend to be much more broadly defined than the traditional “problem populations” dealt with by criminal justice systems. In particular, and especially important in this regard, we have found that corporate security and justice tends to be as much interested in those who create opportunities for loss, as in those who actually cause losses.

Recently in Toronto, for example, a sum of $9000 went missing from a bank cashier's desk. This loss was dealt with internally by the bank without notifying the police. The focus of the bank's own investigation, however, was not on who had stolen the money, but on the cashier — who was not suspected of having stolen the money, but whose failure to follow the bank's procedures governing the security of cashier's registers had created the opportunity for the theft to occur. The thief in this case was never identified, but the cashier was subject to internal disciplinary proceedings which resulted in her dismissal from employment and a revision of the bank's cashier security procedures.

While crimes which involve loss to the corporation are dealt with through internal corporate justice processes of this kind, crimes which are not perceived as involving a risk of loss to the corporation are often not regarded as warranting intervention (eg, moral offences, “victimless” crimes, etc), Indeed, it is not hard to see that certain crimes (eg, gambling, intimidation of union activists, prostitution etc) may actually be seen as a source of direct or indirect profit by certain kinds of business, and therefore not warranting control.

Another aspect of corporate justice which our Calgary bank case illustrates, is that contrary to what many police and private security spokesmen would have us believe, it is not just minor offences against property that are dealt with by internal corporate justice systems. Company officials in Canada have commonly told us that employee thefts, of whatever magnitude, are virtually never reported to the police, and one large financial institution in Toronto has a policy that all corporate losses under $500,000, however incurred, are to be dealt with internally without recourse to public authorities. While it is true that the most serious personal injury crimes such as homicide would normally result in the involvement of police authorities, we have come across numerous instances in our research in which serious crimes of personal violence have been dealt with internally without notifying criminal justice authorities — assaults between workers are the most common, but others, such as kidnapping and sexual offences, are also not always referred to public authorities. Even offences such as manslaughter, if they involve potential corporate liability, may be the subject of corporate attempts to redefine them as “industrial accidents” . In this context, of course, the control which company security officers can exercise over the scene of the "accident" and its investigation can be of critical importance.

The two cases involving banks which have been mentioned so far, also reveal the essentially preventative character of much corporate security and justice — an emphasis which is captured well by the slogan adopted by one private security organization in its recent newspaper advertisement — “Call Wormald today instead of the police tomorrow”. Corporations are particularly well placed to take a proactive, preventative approach to problems, in contrast to the largely reactive, ex post facto, approach taken by the criminal justice system. This is because of their control over the property where, and in relation to which, troubles occur — an advantage which the police, for instance, because of the restrictions which we place on them in order to preserve our privacy, civil rights etc do not share. This access to, and control over, property also allows the cost-effectiveness of corporate justice to be measured much more effectively than that of criminal justice. A private security organization in a corporation, for instance, will often have access to a complete inventory of the property and assets which it must protect from depredation and loss, and losses can accordingly be measured with considerable accuracy and weighed against the costs of security (which also, of course, represent a “loss” for the company). This contrasts significantly with our criminal justice system in which the costs of crime control are normally considered quite separately from the costs of the crime being controlled. Within corporate justice, however, a loss prevention programme which cannot be shown to prevent more loss than it costs to implement is unlikely to be allowed to continue for very long. This is what “justice for profit” is all about.

As the Calgary bank case illustrates, surveillance and the use of technology are essential aspects of this preventative emphasis of corporate justice. Again, corporations are much more able to take advantage of these strategies than their criminal justice counterparts for two reasons. In the first place, their control over the people and the property they are protecting allows them to engage in surveillance under circumstances and to an extent which would never normally be permitted for the public police. And secondly, because the institutions of criminal justice are discrete organizations with particular functions to perform (eg crime control, order maintenance etc), any surveillance or technology they employ must be justified exclusively in terms of its contribution to the performance of those functions. Within a corporate environment, however, surveillance and the use of expensive hardware will typically serve mutliple functions. The hardware which detected the Calgary bank theft, and identified the thief, for instance, served not only such security functions but also other functions (such as accounting, client records, and in that case the cash-dispensing process itself) which are essential to the business of the bank. Similarly, in industry, surveillance and alarm systems may serve not only security goals, but may also serve to monitor safety in the workplace and/or worker productivity.

We have found that corporate justice systems tend to be functionally and occupationally integrated into the other activities of the corporate environment which they serve, in ways which the criminal justice system could never be. Thus, corporate security and corporate justice tend to be administered not primarily by persons hired specially to perform these functions (as is the case with the criminal justice system), but as one element in the jobs of persons who are primarily engaged in other responsibilities.

One of the clearest examples of this which came to our attention involved a large chain of retail clothing stores in Canada, whose corporate officer in charge of security told us that security was a very significant factor in this corporation's operations because of the slender profit margins to be made in the industry as a result of)the highly competitive nature of the business. This officer explained that the corporation placed a high priority on security and allocated a substantial budget to this function. When we asked him how many security officers the company employed, however, his answer surprised us — he was, he said, the only security officer employed by the company. Security, he explained, was a function of every employee of the company, and security responsibilities were included in every job description. The role of specialized security persons in such a system tends, then, to be to supervise the performance of corporate justice functions by non-specialists. To a considerable extent, then, it is analogous to the role of the early constable in Anglo-Saxon and feudal times.

As well as being occupationally integrated, corporate security and justice tend to be conceived as functionally integrated. This functional integration is well illustrated by the remarks of the officer in charge of security in the clothing retail company just discussed. To him, security and sales were not separate functions, but almost identical ones. As he explained it, the objects of good salesmanship and of good security are essentially the same — to ensure that customers leave the premises with merchandise for which they have paid. Thus, a person who was a good salesman was likely to be effecting good security also. Similarly, the processes of corporate justice (especially those dealing with employees) are typically not discrete justice processes, but the more generally operative processes and structures of management. “Offences” are dealt with through normal supervisory and management channels rather than through specialized structures. And the sanctions which are imposed involve the resources and power which are at the particular disposal of the corporation — reductions in wages, transfers, demotions, suspensions, denial of credit or of promotion and — what is known as the “capital punishment of industrial justice” — dismissal. It should be emphasized, however, that punishment is not, as it is in criminal justice, the major goal of corporate justice. The major goal of corporate justice is typically prevention of future harm or loss, which means the major focus of corporate justice tends to be not simply on individual offences and offenders, but on the entire circumstances and environment which has (or may in the future) give rise to the occurrence of losses. This emphasis on prevention thus broadens the scope of corporate justice far beyond that normally associated with criminal justice.

This non-specialized, integrated, embedded character of corporate justice has numerous advantages. As well as being cheap, expeditious and often highly effective in dealing with troubles, it also has the particular virtue of being least disruptive to the environment in which it operates. These advantages go a long way towards explaining why resort to internal processes of corporate justice to deal with their troubles is so often so much more attractive to corporations than resort to the criminal justice system.

Another important aspect of the integrated nature of corporate justice is that it is most commonly based not on distributive adversarial adjudication (which, in theory at least, is the basis of criminal justice), but on techniques of negotiation, mediation, conciliation and arbitration. As such, corporate justice processes tend to resemble politcal processes more closely than legal judicial processes. This allows for a more explicitly socialized form of justice, in which “cases” are dealt with not in isolation and out of context, but with a full consideration of the overall socio-political implications of decisions and dispositions for the entire corporate environment and community. The rigid distinction between justice and law on the one hand, and politics on the other, which is so fundamental to our concepts of criminal justice, is thus largely unknown to corporate justice, and regarded as somewhat bizarre and, for the most part, to be avoided by its practitioners. Thus, for instance, it is not uncommon to find that the resolution of an indiviaual case (eg, an allegation of employee theft) is achieved as part of a bargaining process in which much wider issues, often only marginally related to the circumstances of the individual case, predominate.

The security director of one large manufacturing company whom we interviewed, told us that his company had recently experienced a very serious problem of theft of hand-held power tools by employees. Instead of taking the traditional law enforcement approach to this problem (conducting an investigation, identifying offenders and punishing them), the company's response to the problem was an innovative one which provides a good illustration of the difference between corporate justice processes and criminal justice processes. Company management called a meeting with the union to discuss the problem and negotiate a solution. It transpired that the major reason for the thefts was that employees had jobs to do at home which required such tools, and that they were too expensive to buy or rent for these purposes. As a result, the company agreed to establish a tool lending library within the plant, whereby employees could legitimately borrow company tools overnight or at weekends, under rules agreed to by the union. With considerable satisfaction the security director told us that as a result the theft problem had been almost completely eliminated. In our own research in North America, we are increasingly coming across situations in which the entire process of corporate justice (from loss prevention programmes to the detection, investigation and disposition of serious employee criminality) is the subject of collective bargaining and is spelled out in detail in the collective agreement. Such agreements will sometimes provide not only for when and under what circumstances various surveillance, detection and investigation techniques may be used, but also detailed procedures including rights to representation (by the union) and access to information about allegations against employees (the corporate justice equivalent of discovery in criminal procedure) — which must be followed in disposing of cases internally, and the type and ranges of sanctions which may be employed. Because these are all negotiated, they do not share the mandatory character of criminal justice due process, but may always be waived or modified by agreement between the parties, in favour of other procedures which better suit their interests in particular cases.

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Generalized shared-parameter models and missingness at random

Corporate Justice: Some Preliminary Thoughts *

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Generalized shared-parameter models and missingness at random

Corporate Justice: Some Preliminary Thoughts *