Critics attack normative ethical stakeholder theory for failing to recognize the special moral status of shareholders that justifiesthe fiduciary duties owed to them at law by managers. Stakeholder theorists reply that there is nothing morally significant about shareholders that can underwrite those fiduciary duties. I advance an argument that seeks to demonstrate both the special moral status of shareholders in a firm and the concomitant moral inadequacy of stakeholder theory. I argue that (i) if some relations morally requirefiduciary duties, and (...) (ii) the shareholder-manager relation possesses the features that make fiduciary duties morally necessary to thoserelations, then (iii) stakeholder theory is morally lacking. (shrink)

The relationship between corporate executives and shareholders has riveted the attention of business ethicists since the inception of the field. Most ethicists agree that corporate executives owe their investors the duties of loyalty, candor, and care. These fiduciary duties undergird the promises made to shareholders at the time of incorporation, placing on executives moral obligations to engage in fair dealing and to avoid conflicts of interest.We concur that executives owe all of their existing shareholders both promise-keeping and fiduciary duties and (...) argue that some corporateexecutives violate these responsibilities by attempting to withhold information from or limit information to some shareholders while courting others. We analyze the ethical implications of six techniques and tools that executives use to attract certain types of shareholders while deterring others. We conclude with recommended structural and behavioral changes to these current managerial and investor practices. (shrink)

The current proxy voting system in the United States has become the subject of considerable controversy. Because institutional investment managers have the authority to vote their clients’ proxies, they have a fiduciary obligation to those clients. Frequently, in an attempt to fulfill that obligation, these institutional investors employ proxy advisory services to manage the thousands of votes they must cast. However, many proxy advisory services have conflicts of interest that inhibit their utility to those seeking to discharge their fiduciary duties. (...) In this article, we describe the current proxy advisory network as an example of how current notions of conflicts of interest fall short when explaining the behavior of an interconnected set of market players whose remit is to act in the best interests of their investors. We discuss what participants in this system should do to bring transparency and accuracy to the proxy advice industry. (shrink)

Using a sample of over 700 business people and students, this study tested the premise of promise-keeping as a core ethical value in the work place.The exercise consisted of in-basket planning for layoffs within an organization. Only one of the five employees within the group had been given an express commitment/promise of continued employment for a two year period. The layoffs were being considered six months after the two year promise had been made. All five employees were performing their jobs (...) adequately, and each had either personal or work attributes representing competing values that would have made it difficult to choose among them.Clearly, promise-keeping does not matter most in the workplace: subjects overwhelmingly ignored their promises even when legally bound to keep them. Further, promise-keeping consistently was found to rank last in a hierarchy of workplace values. The legal system was suggested as a viable mechanism for encouraging promise-keeping in the workplace. Although the possibility of legal sanctions increased the frequency with which promises were kept, overall fewer than one-third (30%) of the subjects kept their word. Of those respondents who expressly were told that the promise was legally enforceable, the number who stated that they would keep their promise increased to 57%. (shrink)

Using a sample of over 700 business people and students, this study tested the premise of promise-keeping as a core ethical value in the work place.The exercise consisted of in-basket planning for layoffs within an organization. Only one of the five employees within the group had been given an express commitment/promise of continued employment for a two year period. The layoffs were being considered six months after the two year promise had been made. All five employees were performing their jobs (...) adequately, and each had either personal or work attributes representing competing values that would have made it difficult to choose among them. (shrink)

ABSTRACT:A common complaint by academics and practitioners is that the application of international accountability standards (IAS) does not lead to significant improvements in an organization’s social responsibility. When organizations espouse their commitment to IAS but do not put forth the effort necessary to operationally enact that commitment, a “credibility cover” is created that perpetuates business as usual. In other words, the legitimacy that organizations gain by formally adopting the standards may shield the organization from closer scrutiny, thus enabling rather than (...) constraining the types of activities the standards were designed to discourage.There is a lack of research on why certain types of IAS are more prone than others to being decoupled from organizational practices. Applying a neo-institutional perspective to IAS, we theorize that the structural dimensions of the types of standards themselves can increase the likelihood of organizations adopting IAS standards in form but not in function. (shrink)