In light of recent doctrinal changes, we examine the confused state of U.S. insider trading law, identifying gaps that permit certain market participants to trade on the basis of material nonpublic information, and contrast U.S. insider trading doctrine with the European approach. We then explore the ethical implications of the status quo in the U.S., explaining why the dominant legal justifications for prohibiting classical insider trading and misappropriation—the fiduciary duty and property rights theories—fail to account for the wrongfulness of insider (...) trading by eavesdroppers and certain tippees. We refute common arguments for legalizing insider trading, including arguments that insider trading is a victimless crime and that the practice promotes efficiency. We explain why insider trading constitutes the moral wrong of cheating, grounding our theory in the legitimate expectations of market participants. Having considered Kantian deontology in other work, we find that virtue ethics theory offers a helpful albeit rough framework for assessing the morality of insider trading independent of its legality. We also find that social contract theories, with norms of equality of opportunity and moral desert, provide a compelling ethical basis for retaining, clarifying and broadening current legal prohibitions against insider trading. (shrink)

U.S. multinational enterprises must now follow the policies of Title VII of the Civil Rights Act of 1964 in their overseas operations, at least with respect to U.S. expatriate employees. Doing so in a culture which discourages gender equality in the workplace raises difficult issues, both practically and ethically. Vigorously importing U.S. attitudes toward gender-equality into a social culture such as Japan or Saudi Arabia may seem ethnocentric, a version of ethical imperialism. Yet adapting to host country norms risks a (...) kind of moral relativism. This article supports the view that MNEs which promote workplace equality in a host country such as Japan, which is actively involved in the international economic and political community, is not ethical imperialism in any pejorative sense and is preferable to a moral relativism or social contract approach.We hold these truths to be self-evident: that all men are created equal, and endowed by their creator with certain rights — life, liberty, and the pursuit of happiness. (shrink)

Business and Society Review, Volume 126, Issue 1, Page 3-23, Spring 2021.

Urban communities in 21st century America are facing severe economic challenges, ones that suggest a mandate to contemplate serious changes in the way America does business. The middle class is diminishing in many parts of the country, with consequences for the economy as a whole. When faced with the loss of its economic base, any business community must make some difficult decisions about its proper role and responsibilities. Decisions to support the community must be balanced alongside and against responsibilities to (...) owners, shareholders and relevant “stakeholders” in a relatively new context. Corporations in urban communities “hollowed out” by white flight or urban sprawl must decide what level of support they can and should provide. This paper examines corporate decisions within the emerging urban prosperity initiatives, using the framework of integrative social contract theory proposed by Donaldson and Dunfee. We suggest that urban prosperity initiatives present a mandate on corporations sufficiently strong as to qualify as an authentic norm. Further, we argue that strict adherence to a corporate bottom line approach or “corporate isolationism” is not congruent with contemporary community standards. (shrink)

At the forefront of international concerns about global legislation and regulation, a host of noted environmentalists and business ethicists examine ethical issues in consumption from the points of view of environmental sustainability, economic development, and free enterprise.

Peace is more likely where there is trade and commerce between nation-states. However, many nations are "failed states" or "failing states," in large part because of civil wars. Yet, "business" may have a role to play here, too; as private military security companies (PMSCs) proliferate, governments and international organizations seem increasingly disposed to contract for their services, in some cases for combat roles as well as non-combat support roles in various conflict zones. This has raised questions about the ethics of (...) using private companies for public purposes, especially where (as now) private companies have operated outside of legal accountability. This article suggests ways in which such accountability can be put in place, such that PMSCs can actually serve the cause of securing local and regional stability as a first step toward establishing a much safer environment for people and for business. (shrink)

Government policies and practices can exert significant influence on ethical behavior in a society. Many governments still rely ona long-standing prerogative of sovereigns, the defense of sovereign immunity, to avoid public inquiry about acts that are clearly immoral. However, the basic theory and frequent practice of invoking sovereign immunity cannot be ethically justified. Moreover, such practices model conduct based on power rather than reason, fairness, or justice, and invite both nations and individuals to view politics and business as a power (...) game to be played and won, rather than as a process of buiIding communities that emphasize reciprocity and commitment to moral principles. (shrink)