ABSTRACT:The distinction between what I call nonelective obligations and discretionary obligations, a distinction that focuses on one particular thread of the distinction between perfect and imperfect duties, helps us to identify the obligations that carry over from principals to agents. Clarity on this issue is necessary to identify the moral obligations within “shareholder primacy”, which conceives of managers as agents of shareholders. My main claim is that the principal-agent relation requires agents to fulfill nonelective obligations, but it does not always (...) require discharging discretionary obligations. I show that the requirement to fulfill nonelective obligations is more far-reaching than has been acknowledged by most defenders and critics of shareholder primacy. But I also show that managers are not bound by certain discretionary obligations like charity, showing that their moral obligations are more circumscribed than the obligations that apply to human beings in general. (shrink)

Different perspectives on corporate social responsibility (CSR) exist, each with their own agenda. Some emphasise management responsibilities towards stakeholders, others argue that companies should actively contribute to social goals, and yet others reject a social responsibility of business beyond legal compliance. In addition, CSR initiatives relate to different issues, such as labour standards and corruption. This article analyses what types of CSR initiatives are supported by political and economic arguments. The distinction between different CSR perspectives and CSR issues on the (...) one hand and between political and economic arguments on the other could help to advance the debate on the justification and welfare impact of CSR. It is argued that ordinary boundary conditions for business behaviour in a market economy provide support for some, but not all, CSR initiatives. This has implications for policy priorities. Building on the analysis, it is proposed that more attention should be paid to the behaviour of large multinational enterprises in their normal business operations and to CSR issues with a potentially large impact on market functioning. (shrink)

This article considers the relationship between business ethics and philosophy, specifically in relation to the field and persons working in it. The starting point is a grammatical one: business ethics by the rules of grammar belongs to ethics. In terms of academic disciplines, it belongs to applied ethics, which belongs to ethics, which belongs to practical philosophy, which belongs to philosophy. However, in the field of business ethics today one will seldom meet colleagues from philosophy; instead, they will come from (...) business, applying business studies perspectives, approaches, and increasingly quantitative methods. This article provides empirical evidence that today the three top journals with “business ethics” in their titles are mostly run by business scholars with PhDs in business. The article compares the three journals today with their inaugural issues and finds that at their inception all three were run by a majority of philosophers. The article discusses six possible explanations for this shift and provides suggestions for how to bring business ethics back to philosophers. (shrink)

This paper assesses employees’ moral agency within corporate capitalism from a politically liberal standpoint. While political liberalism has spelt out its key institutional implications at state level, it has neglected moral agency at work, assuming that a rights-based state that secures freedom of contract, free choice of occupation and a free labour market within a fair context would protect it sufficiently. Yet two features of corporate capitalism constrain employees’ moral agency: the relation of authority that forms part of the work (...) contract and organisations’ fragmented decision-making processes. Both seem at odds with the liberal ideal of allowing people to live by their own conception of the good. Consequently, this paper examines whether political liberalism should recommend greater safeguards for protecting workers’ moral agency. It proposes a criterion for assessing corporate capitalism: the ‘moral space’ defined as the socially shaped opportunities for action that can be enacted or endorsed from a comprehensive perspective. It argues that liberals should favour arrangements that widen workers’ moral space and suggests institutional designs that may achieve this while remaining within liberal boundaries. (shrink)

This article is about the relationship between business and ethics in academic research. The purpose of this investigation is to examine the status of the separation and the integration theses. In the course of this article, I defend the claim that neither separation nor integration is entirely accurate; indeed they are both potentially confusing to our audience. A strategy of reconciliation of normative and descriptive approaches is proposed. The reconciliation project does not entail synthesizing or dividing prescriptive and empirical approaches, (...) but rather respecting the identity of both inquiries, while recognizing the limitations they place on each other. The research agenda of the reconciliation project is discussed. (shrink)

ABSTRACT:Corporate governance scholarship focuses on executive malfeasance, specifically its antecedents and consequences. Academic efforts primarily focus on prevention while practitioners are often left to hold firms and executives (including directors) accountable through a variety of sanctions. Even so, executive malfeasance still occurs even in the face of the vast resources used to monitor, control, and penalize firms and executives. In this paper, we posit equity markets do not adequately penalize firms for inaccurate earnings reports. Using a sample of 129 firms (...) identified by the U.S. General Accounting Office for reporting fraudulent earnings in 10K filings, we found support for our assertion. Consequently, the one party who may benefit but escape accountability is firm shareholders. Moreover, we find little empirical evidence that the subset of firms sanctioned by the SEC is penalized more heavily than the full sample by markets at the time they report and correct their 10K filings. Our results raise serious questions whether such managerial opportunism can be eradicated given the apparent lack of consequences in equity markets for investors. We also question whether the SEC is able to discern between fraud and error in financial reporting and its implications. (shrink)

ABSTRACT:Corporate governance scholarship focuses on executive malfeasance, specifically its antecedents and consequences. Academic efforts primarily focus on prevention while practitioners are often left to hold firms and executives (including directors) accountable through a variety of sanctions. Even so, executive malfeasance still occurs even in the face of the vast resources used to monitor, control, and penalize firms and executives. In this paper, we posit equity markets do not adequately penalize firms for inaccurate earnings reports. Using a sample of 129 firms (...) identified by the U.S. General Accounting Office for reporting fraudulent earnings in 10K filings, we found support for our assertion. Consequently, the one party who may benefit but escape accountability is firm shareholders. Moreover, we find little empirical evidence that the subset of firms sanctioned by the SEC is penalized more heavily than the full sample by markets at the time they report and correct their 10K filings. Our results raise serious questions whether such managerial opportunism can be eradicated given the apparent lack of consequences in equity markets for investors. We also question whether the SEC is able to discern between fraud and error in financial reporting and its implications. (shrink)