In the literature, CSR’s roles on firm performance are found to be positive, negative, or neutral. This inconclusive pattern suggests there may be a more complicated mechanism at work than the traditional focus on simple linear associations. We propose and test an inverted-U-shaped relationship between CSR and shareholder value, the fundamental measure of firm performance. Further, we incorporate a critical firm attribute, marketing capability, to moderate the nonlinear link between CSR and shareholder value, thereby exploring a (...) previous understudied area involving the interplay between CSR and market-side competency. The results show that an initial increase in CSR engagement positively drives firm shareholder value, but the effect turns negative when a firm pursues excessive CSR engagement. Notably, however, this negative association does not apply to firms that have a high marketing capability. Our research generates meaningful implications for a stakeholder view of CSR, strategic management, firm valuation, resource-based theories, and business practices. (shrink)

As the economy has grown increasingly financialized, the relationship between financial innovation and instability has attracted more attention. Previous research finds that the proliferation of complex financial innovations, like asset securitization and new financial derivatives, helped to erode the market governance arrangements that kept excessive bank risk-taking in check, inviting instability. This article presents an alternative way of understanding how financial innovations and market governance arrangements combine to shape instability. Market governance arrangements also shape how financial firmsreceiveinnovations, leading to greater (...) or lesser instability at particular times and places. I illustrate this argument by tracing the effects of changing corporate governance arrangements at large US banks in the 1990s and 2000s. Like non-financial firms in the preceding decade, banks adopted reforms associated with the shareholder value model of corporate governance. These changes to internal bank governance arrangements affected the agendas of bank executives in ways that encouraged expanded use of securitization and derivatives. Drawing from this case, I argue that a full understanding of instability in the financialized era requires closer attention to the (institutionally-structured) interests of financial innovationusers—not just to features of financial innovations themselves. (shrink)

This paper examines the shareholder primacy norm as a widely acknowledged impediment to corporate social responsibility and explores the role of business schools in promoting the SPN but also potentially as an avenue for change by addressing misconceptions about shareholder primacy and the purpose of business. We start by explaining the SPN and then review its status under US and UK laws and show that it is not a likely legal requirement, at least under the guise of (...) class='Hi'>shareholder value maximization. This is in contrast to the common assertion that managers are legally constrained from addressing CSR issues if doing so is inconsistent with the economic interests of shareholders. Nonetheless, while the SPN might be muted as a legal norm, we show that it is certainly evident as a social norm among managers and in business schools—reflective, in part, of the sole voting rights of shareholders on corporate boards and of the dominance of shareholder theory—and justifiably so in the view of many managers and business academics. We argue that this view is misguided, not least when associated with claims of a purported legally enforceable requirement to maximize shareholder value. We propose two ways by which the influence of the SPN among managers might be attenuated: extending fiduciary duties of executives to non-shareholder stakeholders and changes in business school teaching such that it covers a plurality of conceptions of the purpose of the corporation. (shrink)

The role of a corporation is often debated as a mutually exclusive choice between economic responsibility to shareholders and social responsibility to society. An evolving viewpoint embraces an integrated approach focused on long-term value creation for shareholders which benefits other stakeholders. Maximizing long-term shareholder value as a corporate objective can be compatible with stakeholder theory when an enlightened shareholder maximization strategy is embraced. Firms implementing an enlightened shareholder maximization strategy are expected to make decisions (...) and use resources which achieve long-term value-creating outcomes. However, critics of enlightened shareholder maximization as a corporate goal contend this strategy conflicts with maximizing shareholder value. This study explores whether firms which embrace a balanced enlightened shareholder maximization strategy indeed create long-term value which does not sacrifice shareholder wealth. (shrink)

Two prominent normative theories of business ethics are stakeholder and shareholder theory. Business ethicists generally favor the former, while business people prefer the latter. If the purpose of business ethics is “to produce a set of ethical principles that can be both expressed in language accessible to and conveniently applied by an ordinary business person” , then it is important to examine this dichotomy.While superficially attractive, the normative version of stakeholder theory contains numerous limitations. Since balancing multiple (...) stakeholder preferences is difficult, competing claims often become tests of political strength rather than justice. Furthermore, stakeholder theory has significant normative weaknesses.Although less attractive to academic ethicists, shareholder theory may provide superior results for society. The shareholder model focuses companies on meeting society’s material needs. Wise owners often balance other stakeholders’ views well since it is necessary for the business’s long-term success. Finally, shareholder theory has a strong normative basis in autonomy.In light of this analysis, it is incumbent upon academic business ethicists to emphasize the value of shareholder theory when teaching business ethics courses. (shrink)

The recent global financial crisis and worst recession since the Great Depression underscore the theoretical and practical importance of defining requirements for assessing alternative theories of capitalism. The expressed goal of Freeman and his co-authors is to replace value-allocating ‘shareholder capitalism’ with value-creating ‘stakeholder capitalism.’ Each theory combines a different value proposition and principal-agent conception. So interpreted, the value creation proposition suggests two requirements for assessing alternative theories. A proposed better theory of capitalism (...) should demonstrate first practicality of prescriptive guidance for managers and second superiority of its embedded value proposition for sustainable long-term performance. Shareholder and stakeholder conceptions are not the only approaches to developing a theory of capitalism embedding a different value proposition and agency model. Two other conceptions suggest organisational wealth and corporate social responsibility (CSR) theories of capitalism. All four alternatives meet the relatively minimal requirement of practicality. Freeman and his co-authors argue the value creation proposition will outperform the value allocation proposition. But organisational wealth and CSR theories may also outperform shareholder capitalism. Demonstrating that stakeholder capitalism will outperform organisational wealth and CSR theories depends on which principal and value proposition one judges most important in particular conditions. (shrink)

According to Streeck and Vogl, the neoliberalization of the state has been the result of political-economic developments that render the state dependent on financial markets. However, they do not explain the discursive shifts that would have been required for demoting the state to the role of an agent to bondholders. I propose to explain this shift via the performative effect of neoliberal agency theory. In 1976, Michael Jensen and William Meckling claimed that corporate managers are agents to shareholding principals, (...) which implied that their main task was the procurement of shareholder value. Agency theory subsequently prescribes a series of measures to ensure the alignment of principal and agent interests in corporations. The diffusion of agency theory, however, moved beyond corporate governance to reconfigure the state. Due to its reliance on capital markets, the state supposedly likewise becomes an agent of the investment public and should procure bondholder value. (shrink)

This essay attempts to develop a new theoretical model for business ethics distinct from the two canonical business‐ethics theories, the stakeholder theory and the shareholder value theory. Milton Friedman argued that because managers are agents of the company's owners, their sole moral responsibility is to maximize owner returns. Thomas Pogge has recently suggested that such a view involves a kind of moral incoherence and that we should reject the efficacy of social arrangements like the principal‐agent relationship (...) in altering moral obligations. Both views fail to give proper account of the dispersal of moral responsibilities in business contexts. We must distinguish “minimal moral obligations” (stemming from justice and rights) from “maximal moral obligations” (stemming from all other moral considerations, including duties of aid, beneficence, and the virtues). Minimal obligations apply to all persons, but maximal obligations can be effected by social arrangements like the owner‐manager relationship. There may be moral obligations incumbent on owners that do not apply to managers. Understanding this distribution of responsibilities enables us to develop a new and attractive model of business ethics––“the ownership model”––which places greater emphasis on the rights and responsibilities of the owners of business than has been traditional in business ethics. (shrink)

Shareholder activists increasingly pressure corporations on social policy issues; yet, extant research provides little understanding of who these activists are and how they choose their corporate targets. In this article, we adopt an activist-centered approach and rely on hybrid organizational identity theory to determine, in a two-phase analysis, how shareholder activists define their economic and social identities and whether these identities are associated with specific target characteristics and tactical strategies. Our findings form the premise of a typology (...) of institutional shareholder activists that is empirically derived and takes into account the wide range of hybrid organizational identities that shareholders exhibit. With a sample of 735 social policy shareholder proposals filed by 104 institutional shareholders in the 2009-2010 period, our study presents one of the first empirical tests examining the heterogeneity of identities within the broad stakeholder category of “social shareholder activists.” Our empirical evidence demonstrates that these shareholders’ mix of economic and social identities is systematically related to their targets’ characteristics and tactical strategies. The implications of our new typology for research on shareholder activism and the value of our findings for managers conclude this article. (shrink)

As corporate managers interact with nonshareholder stakeholders, potential tradeoffs emerge and questions arise as to how these interactions impact shareholder value. We argue that this shareholder—stakeholder debate is an important issue within the overall corporate governance and corporate policy domain and examine one such stakeholder group - employees - by studying labor-friendly corporate practices. We find that announcements of labor-friendly policies are associated with positive abnormal stock returns. Labor-friendly firms also outperform otherwise similar firms, both in terms (...) of long-run stock market returns and operating results. In addition, we find that the probability and benefits of labor-friendliness increase with the demand for highly skilled labor. Our analysis of excess executive compensation suggests that top management derives no pecuniary benefits from labor-friendly practices. We interpret our results as consistent with a genuine concern for employees translating into higher productivity and profitability, which in turn facilitate value creation. It appears that the benefits of labor-friendly practices significantly outweigh the costs and that what is good for employees is good for shareholders. (shrink)

It has been argued amply that alternative theoretical approaches to the corporate governance phenomenon can be a valuable complement to the mainstream economic approach. However, such approaches are largely embryonic and empirical studies based on more organisationally oriented theory are few and geographically limited. The purpose of the present article is to discuss the value of organisationally oriented approaches to corporate governance as a complement to more traditional economic approaches. This is accomplished by discussing the findings of an (...) empirical study on Swedish shareholder activism in the light of institutional sociology. The study demonstrates how the preferences and actions of investors are institutionally determined, and not only influenced by regulation and law, but also by moral obligations, societal expectations and relational ties. Thus, the study demonstrates the value of complementing economic explanations with more institutionally and organisationally oriented accounts, in order to better understand shareholder activism in particular, and corporate governance in general. (shrink)

This paper raises a challenge for those who assume that corporate social responsibility and good corporate governance naturally go hand-in-hand. The recent spate of corporate scandals in the United States and elsewhere has dramatized, once again, the severity of the agency problems that may arise between managers and shareholders. These scandals remind us that even if we adopt an extremely narrow concept of managerial responsibility – such that we recognize no social responsibility beyond the obligation to maximize shareholder (...) class='Hi'>value – there may still be very serious difficulties associated with the effective institutionalization of this obligation. It also suggests that if we broaden managerial responsibility, in order to include extensive responsibilities to various other stakeholder groups, we may seriously exacerbate these agency problems, making it even more difficult to impose effective discipline upon managers. Hence, our central question: is a strong commitment to corporate social responsibility institutionally feasible? In searching for an answer, we revisit the history of public management, and in particular, the experience of social-democratic governments during the 1960s and 1970s, and their attempts to impose social responsibility upon the managers of nationalized industries. The results of this inquiry are less than encouraging for proponents of corporate social responsibility. In fact, the history of public-sector management presents a number of stark warnings, which we would do well to heed if we wish to reconcile robust social responsibility with effective corporate governance. (shrink)

This book presents an academic introduction, presentation and argument of stakeholder theory as as a model for strategic management of business firms and corporations and public organizations and institutions. The concept of stakeholder is generally used for the parties that affect or are affected by the activities of private or public organizations. Stakeholders are those interested parties who, other than shareholders, have a connection with the activities of a corporation, a firm or an organization. The reference to the stakeholders (...) refers to a conception of a business firm as founded on negotiated governance, where the maximization of the value for the shareholder is not the ultimate criterion. In this model the stakes and the interests that are not those of shareholders or investors, and which go beyond capital and include civil society, are important. This book presents this theory and makes it known as an ethical model for strategic management that is both concrete and useful for developing democracy in the firm, and making it possible to present elements of a social contract in the context of global capitalism. (shrink)

The received account of whistleblowing, developed over the last quarter century, is identified with the work of Norman Bowie and Richard DeGeorge. Michael Davis has detailed three anomalies for the received view: the paradoxes of burden, missing harm and failure. In addition, he has proposed an alternative account of whistleblowing, viz., the Complicity Theory. This paper examines the Complicity Theory. The supposed anomalies rest on misunderstandings of the received view or misreadings of model cases of whistleblowing, for example, (...) the Challenger disaster and the Ford Pinto. Nevertheless, the Complicity Theory is important for as in science the contrast with alternative competing accounts often helps us better understand the received view. Several aspects of the received view are reviewed and strengthened through comparison with Complicity Theory, including why whistleblowing needs moral justification. Complicity Theory is also critiqued. The fundamental failure of Complicity Theory is its failure to explain why government and the public encourage and protect whistleblowers despite the possibility of considerable harm to the relevant company in reputation, lost jobs, and lost shareholder value. (shrink)

Shareholder value orientation has been introduced as a means to improve the performance of the corporation. The paper investigates the theoretical justification for the claim that increasing shareholder value is the purpose of corporate governance. It demonstrates that shareholder value is the control principle, not the purpose of the firm. The idea that shareholder value is the only goal of the corporation is a mistaken transfer from the financial to the industrial firm. (...) The paper also questions that the merger of manager interests and owner interests introduced by the remuneration of managers by stock options improves the management performance. The self-apportioning of stock options by the management is in danger of becoming a form of insider trading. (shrink)

With the advent of responsible business, ensuring social responsibility in sourcing is of interest to both academics and practitioners. In this study, we examine one way of achieving this goal: ethical sourcing initiatives (ESIs). ESIs refer to a firm’s formal and informal actions to manage sourcing processes in an ethical and socially responsible manner. While ESIs have been established as an important part of corporate social responsibility, it is unclear whether, how, and when this corporate effort is economically beneficial. We (...) conduct an event study estimating the shareholder value effect of 159 publicly traded firms’ ESIs and find that the stock market reacts positively to ESIs in general. We also compare market reactions under different conditions including reactive versus proactive ESIs, and their interactions with initiative timing, firm size, and financial risk. Additionally, we find that ESIs are associated with long-term stock price and operating performance. Overall, our findings clarify the potential economic benefits of corporate ESIs and encourage buying firms to take these initiatives selectively according to business contexts. (shrink)

There is growing appreciation of the challenges posed by our current economic activity in terms of the natural environment. Increasingly, people have come to appreciate that business must not only be more aware of its environmental impact, but also must be more environmentally sustainable in its core operations. Academic theories of management influence managerial practice. They clarify what is important to the corporation, and where managers and employees should direct their attention. The focus of this paper is to explore the (...) extent to which three possible managerial mindsets—shareholder value maximization, stakeholder value maximization, and the triple bottom line—may either enhance or inhibit the ability of corporations to manage in an environmentally sustainable way. We discuss the implications of each of these mindsets and highlight their relative strengths and weaknesses, noting that all three hold promise, but each has limitations in enabling managers to operate sustainably. (shrink)

Heath’s paper on privatization defends a broadly welfarist-economic approach in thinking about the legitimacy of privatizations. This approach is ‘instrumentalist’ (in contrast to deontological approaches). In this response, I accept the value of an instrumentalist approach to privatization, but argue against Heath’s welfarist version of it, and argue in favor an alternative. First, the ends we seek when thinking about socially vital goods (our theory of public interests) should go beyond Pareto-efficiency. Second, as to the means we employ (...) to realize these ends, we need a view of markets which takes into account not just their competitiveness, but also the distribution of power. This means we need to differentiate market types. Third, we need to differentiate ownership types beyond the standard shareholder-owned company. Alternative ownership structures may be able to realize public interests more easily and hence make privatization less problematic. On these three issues, the picture Heath sketches leaves out too many of the variables that, in the end, may be decisive in whether or not a privatization is acceptable. (shrink)

Although scholars have long known that entrepreneurship involves the interaction of countless individuals beyond the entrepreneur, traditional performance metrics are limited to capturing the economic value that is created for shareholders. Multiple scholars have suggested that it should be possible to develop a more complete assessment that is able to simultaneously capture both the economic and non-economic consequences of entrepreneurship that exist for the broader network of firm stakeholders. The purpose of this paper is to provide a more nuanced (...) understanding of entrepreneurial performance by operationalizing the concept of stakeholder capabilities. Building on concepts from stakeholder theory and the human development and capability approach in welfare economics, we argue that the pursuit of entrepreneurial opportunities can either create or destroy value for multiple stakeholders, and that this value is best conceived in terms of increases and decreases in individual capabilities. Approaching entrepreneurial performance from a stakeholder capabilities lens has implications for how we view entrepreneurs’ impact on society, what we mean by the creation and destruction of “value,” and how we define failure and success in entrepreneurship. (shrink)

There is tension in the US healthcare system due to conflicting goals of maximizing the public's health and at the same time ensuring shareholder profit among the many private organizations that provide care to those in need. As a result, nurses (often the frontline workers in this mixed public/private and economized system) may experience dissonance between their professional values and the capitalistic values embodied in the healthcare system. Beyond the workplace, nurses are also committed to championing health and wellness, (...) to advocating for social justice, and driving health policy. Yet, constrained by the conflicts between neoliberal values in an economized system and the values of care that inspire many to join the healthcare profession, nurses may lose the ability to live up to their moral ideals, to champion social justice, and to improve public health outcomes. In this paper, we use the critical theory of Juergen Habermas to explore these tensions and to suggest a path forward for nurses. We suggest that by engaging in dialog with each other and the public, and working for greater inclusivity, nurses can find ways to deconstruct ideologies inherent in our current healthcare system, to consider alternatives, and liberate healthcare from the dominance of market forces. (shrink)

What is it for a car, a piece of art or a person to be good, bad or better than another? In this first book-length introduction to value theory, Francesco Orsi explores the nature of evaluative concepts used in everyday thinking and speech and in contemporary philosophical discourse. The various dimensions, structures and connections that value concepts express are interrogated with clarity and incision. -/- Orsi provides a systematic survey of both classic texts including Plato, Aristotle, Kant, (...) Moore and Ross and an array of contemporary theorists. The reader is guided through the moral maze of value theory with everyday examples and thought experiments. Rare stamps, Napoleon's hat, evil demons, and Kant's good will are all considered in order to probe our intuitions, question our own and philosophers' assumptions about value, and, ultimately, understand better what we want to say when we talk about value. -/- 1. Value and Normativity 1.1 Introduction 1.2 Which Evaluations? 1.3 The Idea of Value Theory 1.4 Value and Normativity 1.5 Overview 1.6 Meta-ethical Neutrality 1.7 Value Theory: The Questions -/- 2. Meet the Values: Intrinsic, Final & Co. 2.1 Introduction 2.2 Final and Unconditional Value: Some Philosophical Examples 2.3 Intrinsic Value and Final Value 2.4 The Reduction to Facts 2.5 Intrinsic and Conditional Value 2.6 Elimination of Extrinsic Value? 2.7 Summary -/- 3. The Challenge against Absolute Value 3.1 Introduction 3.2 Geach and Attributive Goodness 3.3 Foot and the Virtues 3.4 Thomson and Goodness in a Way 3.5 Zimmerman's Ethical Goodness 3.6 A Better Reply: Absolute Value and Fitting Attitudes 3.7 Summary -/- 4. Personal Value 4.1 Introduction 4.2 Moore on Good and Good For 4.3 Good For and Fitting Attitudes 4.4 Moore Strikes Back? 4.5 Agent-relative Value 4.6 Impersonal/Personal and Agent-neutral/Agent-relative 4.7 Summary -/- 5. The Chemistry of Value 5.1 Introduction 5.2 Supervenience and Other Relations 5.3 Organic Unities 5.4 Alternatives to Organic Unities: Virtual Value 5.5 Alternatives to Organic Unities: Conditional Value 5.6 Holism and Particularism 5.7 Summary -/- 6. Value Relations 6.1 Introduction 6.2 The Trichotomy Thesis and Incomparability 6.3 A Fitting Attitude Argument for Incomparability 6.4 Against Incomparability: Epistemic Limitations 6.5 Against Incomparability: Parity 6.6 Parity and Choice 6.7 Parity and Incomparability 6.8 Summary -/- 7. How Do I Favour Thee? 7.1 Introduction 7.2 Three Dimensions of Favouring 7.3 Responses to Value: Maximizing 7.4 Two Concepts of Intrinsic Value? 7.5 Summary -/- 8. Value and the Wrong Kind of Reasons 8.1 Introduction 8.2 The Fitting Attitude Account and its Rivals 8.3 The Wrong Kind of Reasons Problem 8.4 The Structure of the Problem and an Initial Response 8.5 Reasons for What? 8.6 Characteristic Concerns and Shared Reasons 8.7 Circular Path: No-Priority 8.8 Summary . (shrink)

The idea of a patient's best interests raises issues in prudential value theory–the study of what makes up an individual's ultimate (nonmoral) good or well‐being. While this connection may strike a philosopher as obvious, the literature on the best interests standard reveals almost no engagement of recent work in value theory. There seems to be a growing sentiment among bioethicists that their work is independent of philosophical theorizing. Is this sentiment wrong in the present case? Does (...) value theory make a significant difference in interpreting best interests? In pursuing this question, I begin with a quick sketch of broad kinds of value theories, identifying representatives that are plausible enough to count as contenders. I then explore what each account suggests in (1) neonatal treatment decisions, and (2) decisions for patients in persistent vegetative states. I conclude that while these accounts converge somewhat in their interpretations of best interests, they also have importantly different implications. (shrink)

The term “value theory” is used in at least three different ways in philosophy. In its broadest sense, “value theory” is a catch-all label used to encompass all branches of moral philosophy, social and political philosophy, aesthetics, and sometimes feminist philosophy and the philosophy of religion — whatever areas of philosophy are deemed to encompass some “evaluative” aspect. In its narrowest sense, “value theory” is used for a relatively narrow area of normative ethical (...) class='Hi'>theory of particular concern to consequentialists. In this narrow sense, “value theory” is roughly synonymous with “axiology”. Axiology can be thought of as primarily concerned with classifying what things are good, and how good they are. For instance, a traditional question of axiology concerns whether the objects of value are subjective psychological states, or objective states of the world. (shrink)

The primary appeal of stakeholder theory in business ethics derives from its promise to help solve two large and often morally difficult problems: (1) how to manage people fairly and efficiently and (2) how to determine the extent of a firm's moral responsibilities beyond its obligations to enhance its profits and economic value. This article investigates a variety of conceptual quandaries that stakeholder theory faces in addressing these two general problems. It argues that these quandaries pose intractable (...) obstacles for stakeholder theory which prevent it from delivering on its large promises. Acknowledging that various versions of stakeholder theory have made a contribution in elucidating the complex nature of firms and business decision making, the article argues that it is time to move on. More precise explications of the nature of modern firms focusing on the application of basic moral principles to different business contexts and situations are likely to prove more accurate and useful. (shrink)

This chapter surveys a variety of views about which states of affairs are intrinsically good, that is, in themselves or apart from their consequences. It considers the claims to intrinsic value of such states of individuals as pleasure, the fulfillment of desire, knowledge, achievement, moral virtue, and personal relationships; the different ways such goods can be compared and aggregated both within and across individual lives; and the possibility, given a principle of “organic unities,” of goods located in wholes larger (...) than individual lives, such as complex ecosystems. (shrink)

The present global financial crisis has revived the notion that competitive markets may lead some directors and executives to behave in opportunistic ways considered unethical and even illegal, through the pursuit of self-interest. This article proposes and tests an integrated model that offers new insights into the relationship between board structure, independence and firm value. By incorporating the proportion of independent directors on the board as a moderating factor in this relationship, this study contributes to a better understanding of (...) the entrenchment and convergence-of-interests hypotheses. Using empirical data obtained from 114 Spanish listed companies in a context of economic crisis, from 2007 to 2010, we conclude that having a board with a greater proportion of independent directors reduces the negative association existing between firm value and a large board size and significant board share ownership. (shrink)

We argue that though stakeholder theory has much to recommend it, particularly as a heuristic for thinking about business firmsproperly as involving the economic interests of other groups beyond those of the shareholders or other equity owners, the theory is limited by its focus on the interests of human participants in business enterprise. Stakeholder theory runs into intractable philosophicaldifficulty in providing credible ethical principles for business managers in dealing with some topics, such as the natural environment,that do (...) not directly involve human beings within a business firm or who engage in transactions with a firm. Corporate decision-makingmust include an appreciation of these ethical values even though they cannot be captured in stakeholder theory. (shrink)

Banks have an important social responsibility to serve the real economy and to maintain financial stability, and they also need to be responsible to borrowers and others. Against the backdrop of the COVID-19 pandemic affecting the global economy and increasing financial risks, it is particularly important for banks to assume social responsibilities. This study theoretically analyzed the outstanding applicability of stakeholder governance theory. Using a two-stage game method, the optimal pressure intensity of the social responsibility stakeholders was calculated, and (...) the dynamic performance of shareholders was deduced. We found that the establishment of the social responsibility stakeholder governance mechanism will prompt the bank to fulfill its social responsibilities; rational social responsibility stakeholders will not lead to poor bank management due to excessive behavior; and shareholders with social responsibility can self-consciously choose the investment projects with lower negative externalities. The conclusions can be summarized as follows: The participation of stakeholder and the establishment of the social responsibility function of the board of directors can help promote a bank's social responsibility performance. This work studied the social responsibility of banks from the new perspective of stakeholder governance, expands the theoretical boundaries, and puts forward relevant suggestions to enhance the application value of this research. (shrink)

Liberal political theorists often argue that justice requires limits on policy outcomes, limits delineated by substantive rights. Distinct from this project is a body of literature dedicated to elaborating on the meaning of democracy in procedural terms. In this article, I offer an alternative to the traditional divide between procedural theories of democracy and substantive theories of justice; I call this the ‘value theory of democracy’. I argue that the democratic ideal is fundamentally about a core set of (...) values (political autonomy, equality of interests, and reciprocity) with both procedural and substantive implications. Further, I contend that limits on policy outcomes can be newly understood as part of the democratic ideal. Key Words: democracy • rights • substantive • procedural • Habermas. (shrink)

The objective of Holmes Rolston, III’s writings has been the development of an “ecologically formed” environmental ethics based both on environmental values and ecological description. I show how recasting Rolston’s value theory in terms of H. Richard Niebuhr’s relational value theory can clarify and strengthen this project. Niebuhr developed a theory of value in which value is found in relationships and value systems are constructed in relation to centers of value. Niebuhr’s (...) contextual method, with which Rolston’s methodology has substantial affinity, is particularly open to the use of such sciences as ecology. I conclude that this recasting of Rolston’s important work in terms of relational value and contextual method can clarify the use of ecology in ethics and can contribute to ethical reflection on such difficult problems as the spotted owl controversy. (shrink)

Three of the major issues in information ethics – intellectual property, speech regulation, and privacy – concern the morality of restricting people’s access to certain information. Consequently, policies in these areas have a significant impact on the amount and types of knowledge that people acquire. As a result, epistemic considerations are critical to the ethics of information policy decisions (cf. Mill, 1978 [1859]). The fact that information ethics is a part of the philosophy of information highlights this important connection with (...) epistemology. In this paper, I illustrate how a value-theoretic approach to epistemology can help to clarify these major issues in information ethics. However, I also identify several open questions about epistemic values that need to be answered before we will be able to evaluate the epistemic consequences of many information policies. (shrink)

This chapter deals with an area of study sometimes called “formal value theory” or “formal axiology”. Roughly characterized, this area investigates the structural and logical properties of value properties and value relations, such as goodness, badness, and betterness. There is a long-standing controversy about whether goodness and badness can, in principle, be measured on a cardinal scale, in a way similar to the measurement of well-understood quantitative concepts like length. Sect. 28.1 investigates this issue, mainly by (...) comparing the properties of the relations “longer than” and “better than”. In Sect. 28.2, some attempts to define goodness and badness in terms of the betterness relation are discussed, and a novel suggestion is made. Sect. 28.3, finally, contains an attempt to define the recently much discussed value relation “on a par with” in terms of the more familiar betterness relation. (shrink)

This paper reports on the results of an experiment conducted with experienced corporate directors. The study findings indicate that directors employ prospective rationality cognition, and they sometimes make decisions that emphasize legal defensibility at the expense of personal ethics and social responsibility. Directors recognize the ethical and social implications of their decisions, but they believe that current corporate law requires them to pursue legal courses of action that maximize shareholder value. The results suggest that additional ethics education will (...) have little influence on the decisions of many business leaders because their decisions are driven by corporate law, rather than personal ethics. (shrink)

A survey study was conducted to look into the effect of Confucian ethics and the psychological foundations of morality on business managers' perspectives on corporate social responsibility (CSR). Using responses from 393 Chinese managers, we first conducted confirmatory factor analysis to assess the reliability and validity of the measurement model and then employed hierarchical regression to explore the relationships among Confucian ethics, moral foundations, and managers' shareholder value perspectives. The results indicate that both Confucian ethics and managers' moral (...) foundations had significant influence on shareholder value perspectives. In fact, moral foundations and Confucian ethics interacted and jointly affected managers' positions on the shareholder value model of corporate responsibility. This study demonstrates the importance of psychological foundations of morality to managers' CSR orientations and substantiates the persistent impact of Confucian ethics/cultural traditions on today' business practices. (shrink)

In order to guide the decisions of real people who want to bring about good epistemic outcomes for themselves and others, we need to understand our epistemic values. In Knowledge in a Social World, Alvin Goldman has proposed an epistemic value theory that allows us to say whether one outcome is epistemically better than another. However, it has been suggested that Goldman's theory is not really an epistemic value theory at all because whether one outcome (...) is epistemically better than another partly depends on our non-epistemic interests. In this paper, I argue that an epistemic value theory that serves the purposes of social epistemology must incorporate non- epistemic interests in much the way that Goldman's theory does. In fact, I argue that Goldman's theory does not go far enough in this direction. In particular, the epistemic value of having a particular true belief should actually be weighted by how interested we are in the topic. (shrink)

Volume 20, Issue 3, March 2020, Page 71-73.

Previous research demonstrates the critical role moral disengagement plays in unethical decision-making. This study investigates the relationships among moral endorsement, shareholder-value orientation, moral disengagement, and moral judgment on issues of different moral intensities. The results of a scenario-based survey conducted in China confirm the negative (positive) impact of moral disengagement (moral intensity) on moral judgment. The findings reveal that both moral endorsement and shareholder-value orientation of decision-makers significantly influence moral judgment and that moral intensity moderates the (...) relationships between moral endorsement and moral judgment, and between shareholder-value orientation and moral disengagement. The study’s theoretical contributions, managerial implications, and limitations are discussed. (shrink)

This study examines the effect of integrating sustainability into corporate strategy on various aspects of shareholder value creation and financial performance in the British capital market. The employed method is based on the content analysis of corporate disclosures and a new technique for assessing the adoption of the corporate sustainability concept. Using extensive data of FTSE 350 firms covering the years 2006–2012, 65 companies were selected as meeting corporate sustainability criteria. For the above period, we find that these (...) firms were characterized by higher financial risk exposure, lower asset growth rates, lower BV/MV ratios, lower EVA ratios, and higher MVA ratios. Such relations were generally present among different size and industry groupings. The results support the thesis that firms that incorporate sustainability issues into their business operations are better able to leverage their resources toward stronger financial performance and shareholder value creation than other companies. The paper contributes to the literature by offering a more holistic approach to corporate sustainable performance measurement and shedding additional light on its relation to financial performance in the context of the recent global financial crisis and its direct aftermath. (shrink)

The appropriate MBA curriculum has been debated for nearly a half century. More recently, critics contend that the emphasis on functional fields in MBA education has incorrectly elevated the importance of shareholder value resulting in unethical behavior. Although some criticism of MBA programs has merit, shareholder wealth maximization should remain the dominant management objective because it is relatively easy to implement and generally consistent with the interests of stakeholders.

Ed Freeman’s influential ideas on stakeholder theory, business ethics, humanities, and capitalism became foundational in the management field and turned around the mainstream thinking about business. Stakeholder theory developed by Freeman and others posits that business is not as much about profits, but rather about creating value for its stakeholders, including employees, customers, communities, financiers, and suppliers. The relationship between a company and its stakeholders is the essence of business and should be of utmost attention to its (...) managers. Managers should avoid resorting to trade-offs by prioritizing one stakeholder group (e.g., shareholders) over the others and strive to run their companies in the interests of all stakeholders. The idea of pursuing the interests of all stakeholders became revolutionary in management and went far beyond the management field, expanding to Law, Health Care, Education, Public Policy and Administration, and Environmental Policy. This book is a collection of Ed Freeman’s most influential and important works on stakeholder theory as well as business ethics, humanities, and capitalism. (shrink)

This study examines the role of corporate philanthropy in the management of reputation risk and shareholder value of the top 100 ASX listed Australian firms for the 3 years 2011–2013. The results of this study demonstrate the business case for corporate philanthropy and hence encourage corporate philanthropy by showing increasing firms’ investment in corporate giving as a percentage of profit before tax, increases the likelihood of an increase in shareholder value. However, the proviso is that firms (...) must also manage their reputation risk at the same time. There is a negative association between corporate giving and shareholder value which is mitigated by firms’ management of reputation. The economic significance of this result is that for every cent in the dollar the firm spends on corporate giving, Tobin’s Q will decrease by 0.413 %. In contrast, if the firm increase their reputation by 1 point then Tobin’s Q will increase by 0.267 %. Consequently, the interaction of corporate giving and reputation risk management is positively associated with shareholder value. These results are robust while controlling for potential endogeneity and reverse causality. This paper assists both academics and practitioners by demonstrating that the benefits of corporate philanthropy extend beyond a gesture to improve reputation or an attempt to increase financial performance, to a direct collaboration between all the factors where the benefits far outweigh the costs. (shrink)

A reprint of the popular 1969, Prentice-Hall edition, the principal innovation of this philosophical introduction to value theory is its focus upon values as they are dealt with in everyday life situations, and have sometimes been studied by sociologists and social psychologists, rather than upon value as has been standard in the philosophical tradition.

This book introduces an important chapter of Polish 20th century philosophy, by analyzing the studies that contributed to value theory; i.e. the studies of Kazimierz Twardowski, Tadeusz Czeżowski, Tadeusz Kotarbiński, Władysław Tatarkiewicz, Roman Ingarden, Henryk Elzenberg, Maria Ossowska, and Józef Maria Bocheński.

Based on the concept of shareholder primacy, many scholars have argued that it is more important for businesses to earn profits for their shareholders than to provide benefits to society at large. Corporate social responsibility is often regarded as an investment that comes at the expense of shareholders. In contrast, research analyzing the connections between the equity ownership structure of a company and its level of CSR engagement suggests that CSR offers benefits to shareholders that go beyond direct financial (...) returns from investments. This study provides a comprehensive review and systematic assessment of theoretical considerations and approaches regarding different forms of equity ownership and their relationships to CSR, and it discusses the relevant benefits and motivations of shareholders. The perceived value of these CSR benefits varies among different types of shareholders, as they assign unequal values to short-term financial or to rather long-term CSR benefits. Based on a literature sample of 146 publications, this review demonstrates central problems inherent in previous analyses. Given the ambiguous and partially contradictory findings of prior research, this study identifies potential moderating influences that help clarify empirical evidence. A contingency approach is suggested in future research, as this can help resolve the problem of contradictory empirical findings and theoretical arguments. (shrink)