BP and the Business Year

Among the lessons to be learned from the main business story of the last year, the Gulf of Mexico oil spill, Jewish business ethics have something to contribute. In a world increasingly dominated by legalities and litigation, BP might have relied on the rules of the American Oil Spill Liability Trust Fund, according to which their liability for damages (as distinct from restoration work) would have been limited to $75 million. But in fact, at an early stage BP announced that they were not intending to rely on this legal limitation of liability, but would establish a fund to compensate anyone harmed by the disaster, a fund whose assets currently total $20 billion.

Of course, it is not unreasonably cynical to speculate that this massive gesture may have owed more to commercial and political pressures and realities than to ethical commitment; but it does reflect Jewish ethical teaching.

The one feature of Jewish business law that is at most striking variance with secular commercial law throughout the modern world is the complete absence of the concept of limited liability. In Britain, the development of limited liability companies began with the need to finance industrial growth, and they have become a feature of the commercial world taken for granted by the entire business community. But while limitation of liability is the norm for the secular commercial world, with the courts prepared to “pierce the corporate veil” and impose personal liability on directors only in very limited circumstances, the halachic presumption is the reverse, with limitation of liability only being permitted as a rare exception.

The notion of liability and responsibility is the essence of Jewish business ethics and, indeed, of the Jewish world-attitude generally. Judaism encourages entrepreneurial endeavour; but the more my activities take me into areas that affect other people’s lives, the more I am required to accept responsibility for their lives, and to ensure that I do not do more harm than good for those with whom I come into contact.

The spiritual stock-taking which Jews undertake on Rosh Hashanah, in regard to our business and other activities of the previous year, includes checking that if we have inadvertently harmed others in the course of our activities, we have also done everything possible – and not just everything convenient or required by secular commercial law – to put things right.

Daniel Greenberg, honorary consultant to JABE, Jewish Association for Business Ethics.