Despite some exceptions, the business ethics literature on the moral responsibility of corporations does not emphasize a subject critical to that inquiry: the general nature of corporations. This article attempts to lessen the imbalance by describing three conceptions of the corporation that have been prominent in twentieth century legal theorizing, and by sketching their implications for the moral responsibility of corporations. These three conceptions, at least two of which have counterparts in the philosophical and organizational theory literature, are the concession, (...) aggregate, and real entity theories. The article concludes that the real entity theory is the most plausible of the lot. At least under prevailing tests of moral responsibility, it then contends, corporations-as-real-entities are morally responsible for most of their members' actions. (shrink)

The claim that managers have a fiduciary duty to shareholders to run the corporation in their interests is generally supported by two arguments: that shareholders are owners of a corporation and that they have a contract or agency relation with management. The latter argument is used by Kenneth E. Goodpaster, who rejects a multi-fiduciary, stakeholder approach on the grounds that the shareholder-management relation is “ethically different” because of its fiduciary character. Both of these arguments provide an inadequate basis for the (...) fiduciary duties of officers and directors of corporations. The basis is to be found, rather, in considerations of public policy, a point that was established in the Dodd-Berle exchange of the 1930s. This conclusion also shows the inadequacy of Goodpaster’s solution to the so-called stakeholder paradox, and an alternative solution to the paradox is presented. (shrink)