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)

This paper discusses the normative ethical theory of the business firm advanced principally by William E. Evan and R. Edward Freeman. According to their stakeholder theory, the firm should be managed for the benefit of its stakeholders: indeed, management has a fiduciary obligation to stakeholders to act as their agent. In this paper I seek to clarify the theory by discussing the concept of a stakeholder and by distinguishing stakeholder theory from two varieties of stockholder theory-I call them ‘pure’ and (...) ‘tinged.’ I argue that the distinctive claims of stakeholder theory, as contrasted with tinged stockholder theories, have been inadequately supported by argument. (shrink)

This essay articulates a crucial and neglected element of a general theory of the ethics of bureaucratic organizations, both private andpublic. The key to the approach developed here is the thesis that the distinctive ethical principles applicable to bureaucratic organizations are responses to the distinctive agency-risks that arise from the nature of bureaucratic organizations as complex webs of principal/agent relationships. It is argued that the most important and distinctive ethical principles for bureaucratic organizations express commitments on the part of bureaucrats (...) that function to reduce the agency risks that are inherent in such organizations. This approach to the ethics of bureaucratic organizations is shown to be more illuminating than those that concentrate exclusively or primarily on determining the conditions for corporate responsibility or on the idea that the ethical obligations distinctive of bureaucracies are role-derived. (shrink)