When corporations engage in misconduct, we rely on two types of sanctions to discipline them: legal and reputational. For various reasons, both types of sanctions have limitations. This chapter argues that a combination of legal and reputational sanctions for corporate misconduct can help to improve the effectiveness of blame attribution, deliver meaningful punishment for misconduct, and foster organizational change. For example, legal sanctions through lawsuits and government fines can trigger reputational sanctions that can unleash a subsequent wave of monetary costs because the publicity associated with the lawsuit or government fine can lead a corporation’s stakeholders to re-evaluate their relationship with it. Alternatively, legal rules can facilitate the operation of reputational markets by increasing information flows and thereby improving attribution of conduct to particular companies.

In recent years, there has been increasing pressure on corporate entities to engage in moral or ethical decision- making. Given the immense economic and political power of modern corporate entities, it becomes critical to determine the origin point of these ethical decisions, both to ensure that corporations are held responsible for their moral choices and to tether corporate moral decision-making power to the appropriate group, or groups, of human beings. Determining to whom corporate morality should be attributed is not an easy task, however, and requires consideration not just of the people involved in the corporation but also of the role the corporation plays within a representative democracy. Ultimately, inquiry into the attribution of a corporation’s moral judgments may best be seen as fluid and context-dependent. That is, it should examine both the way the corporation is structured and the importance of representation for the moral choices of corporate stakeholders.