Weeding Out Flawed Versions of Shareholder Primacy: A Reflection on the Moral Obligations That Carry Over from Principals to Agents

Business Ethics Quarterly 29 (4):519-544 (2019)


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.

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Santiago Mejia
Fordham University

References found in this work

Utilitarianism: For and Against.J. J. C. Smart & Bernard Williams - 1973 - Cambridge: Cambridge University Press.
Groundwork of the Metaphysics of Morals.Immanuel Kant - 1785 - In Elizabeth Schmidt Radcliffe, Richard McCarty, Fritz Allhoff & Anand Vaidya (eds.), Late Modern Philosophy: Essential Readings with Commentary. Blackwell.
Capitalism and Freedom.Milton Friedman - 1962 - Ethics 74 (1):70-72.
Business Ethics and Stakeholder Analysis.Kenneth E. Goodpaster - 1991 - Business Ethics Quarterly 1 (1):53-73.

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Citations of this work

Socratic Ignorance and Business Ethics.Santiago Mejia - 2022 - Journal of Business Ethics 175 (3):537-553.
The Moral Imperatives of Humanistic Management.Santiago Mejia - 2019 - Humanistic Management Journal 4 (2):155-158.

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