Recent scandals at Enron, WorldCom and Global Crossing have put the ethical spotlight on corporate malfeasance as never before. However, these are the situations in which management knew that they made the wrong choice. As professor Joseph Badaracco of Harvard Business School points out, the real ethical dilemmas arise when people must choose between right and right — where both choices can be justified, yet one must be chosen over the other. Whether or not to reprice stock options represents (...) one such ethical dilemma. Repricing can help exodus of talented employees and motivate them to improve firm performance. However, it alienates shareholders and other workers of the company who are left unprotected from the adverse economic consequences of a stock price decline.In this paper we examine the ethics and the economics of stock option repricing. We find that repricing runs counter to two key tenets of business ethics — distributive justice and ordinary decency. To examine the economics of repricing, we draw upon agency theory to identify situations where repricing has the potential to benefit shareholders. However, a survey of empirical research reveals that these benefits do not translate into reality. Repricing does not improve employee retention or firm performance. In addition, managers benefit by opportunistically timing the repricing. Due to weaknesses in corporate governance such as lack of independence and conflicts of interest, the current repricing practice seems to be at odds with the objective of shareholder wealth maximization, and at a more fundamental level, a violation of board's fiduciary duty to shareholders. We offer suggestions that mitigate the ethically undesirable effects of repricing in the wider context of prevailing corporate governance and regulatory environment. We believe that these suggestions, if properly implemented, can transform repricing from a greed-inspired evil to a valuable compensation tool to retain employees, boost their morale, and enhance stockholder wealth. (shrink)

Prior research has examined several ethical questions related to executive compensation. The issues that have received most attention are whether executives' pay is fair and justified by performance. Since more recent studies show that stock options grants constitute the single largest component in executive compensation, we examine the relations of these grants to economic determinants and corporate governance for firms in the stagnant stage of their lifecycle. We find that, on average, stock options grants comprise a significant portion (...) of annual CEO compensation (26.4%) for stagnant firms. We also find that economic (corporate governance) factors explain less (or more) of the cross-sectional variation in stock options grants for stagnant firms than for growth firms. Furthermore, we document lower pay-performance sensitivity (i.e., weaker incentive alignment) and no improvement in future firm performance from past stock options grants to CEOs of stagnant firms. In particular, our study provides empirical evidence on some inefficiencies associated with stock options grants to CEOs of low potential (stagnant) firms, a long-standing concern of business ethics researchers (Moriarty, 2005; Nichols and Subramaniam, 2001; Perel, 2003). Our results also provide support for the corporate governance reforms discussed in Matsumura and Shin (2005), especially those proposed provisions that curtail the power of CEOs in the governance of firms. (shrink)

Backdating of stock options is an example of an agency problem. It has emerged despite all the measures (i.e., new regulations and additional corporate governance mechanisms) aimed at addressing such problems? Beyond such negative controlling measures, a more positive empowering approach based on ethics may also be necessary. What ethical measures need to be taken to address the agency problem? What values and norms should guide the board of directors in protecting the shareholders' interests? To examine these issues, we (...) first discuss the role values and norms can play with respect to underlying corporate governance and the proper role of directors, such as transparency, accountability, integrity (which is reflected in proper mechanisms of checks and balances), and public responsibility. Second, we discuss various stakeholder approaches (e.g., government, directors, managers, and shareholders) by which conflicts of interest (i.e., the agency problem) can be addressed. Third, we assess the practice of backdating stock options, as an illustration of the agency problem, in terms of whether the practice is legally acceptable or ethically justifiable. Fourth, we proceed to an analysis of good corporate governance practice involving backdating options based on a series of ethical standards including: (1) trustworthiness; (2) utilitarianism; (3) justice; and (4) Kantianism. We conclude that while executive compensation schemes (e. g., stock options) were originally intended to help remedy the agency problem by tying together the interests of the executives and shareholders, these schemes may have actually become "part of the problem," and that the solution ultimately depends upon whether directors and executives accept that all of their actions must be based on a set of core ethical values. (shrink)

Recent changes to accounting standards for employee stock-based compensation with contingent features are examined. The implementation of FAS 123R by the Financial Accounting Standards Board in December 2005 now requires the fair value of such expenses to be recorded in net income. This accounting change is now impacting the reported financial statements of firms that have been substantial users of employee stock options. This provides an opportunity to directly observe the actual impact FAS 123R is having on such (...) firms. Arguments for and against mandatory expensing are reviewed and an assessment of the contrasting positions provided. Significant limitations of current reporting requirements for executive stock options identified in Poitras (2004) still have not been addressed. (shrink)

This paper examines the ethics of contemporary managerial compensation in the context of executive stock options. Economic considerations would dictate that executive stock options should be adjusted to eliminate the effect of overall stock market movements which are beyond the control of the executive. However, in practice, most executive stock options are not adjusted to control for these outside factors. Agency considerations are the most likely culprit. Adjusting for the influence of outside factors, such as a (...) generally rising stock market, from executive stock options sets a higher bar for managers to reach. Furthermore, traditional accounting standards permitted firms that did not adjust options to avoid reporting options as expenses. This presents CEOs and boards of directors with a major ethical dilemma. On the one hand, their duty to their shareholders and stakeholders dictates that executive stock options should be adjusted to eliminate outside noise from unrelated movements in the overall stock market. However, financial statements are presented in the language of accounting. If the overwhelming majority of the users of a language define a particular item in one way, then to deviate from the norm implies that the recipient of such a deviant statement may not properly interpret the statement. Likewise, if the standard practice is for firms to use unadjusted options and thus under-report expenses, to deviate from this industry norm risks that users of financial statements would not properly interpret the financial statements, with perhaps negative consequences for the shareholders. In short, if "everyone else does it," then it could be wrong for an individual firm to deviate from the norm as that would harm the shareholders. (shrink)

This study examines events at the conclusion of the 2006 stock option backdating scandal: the departures of C-level executives from firms implicated in backdating. The authors ask whether removing executives brings closure to the scandal, or if executive turnover creates greater uncertainty. Using a sample of 236 executive departures, the authors find that although overall market reaction to executive departures is negative, those departures involving a firm’s CEO or CFO ameliorate the market reaction. The authors also find that (...) market reaction worsens when the CEO “resigns,” versus being terminated, and when the firm involved has been previously identified as socially responsible. Results suggest that firms, by shaping who and how executives depart, may amplify or dampen the damage of existing scandalizing events. (shrink)

In this paper, we compare firm-specific attributes including outside director remuneration for two groups of firms. One of these groups consists of 96 firms that did not give stock options to the CEO during the sample period 1992 2001, while the other group of 571 firms granted stock options on a consistent basis during these years. Our results indicate that for the group with stock option grants, the remuneration to outside directors was significantly higher and the (...) CEO had longer tenure compared to the other group. These results are robust even after controlling for other economic attributes associated with the decision to grant stock options. (shrink)

Abstract:While many aspects of stock and option based compensation for corporate officers remain controversial, we suggest that the growing trend for similar practices in favor of boards of directors will prove to be even more contentious. High-ranking corporate managers do not set their own salaries nor authorize their own stock options. By contrast, boards of directors do, in fact, set their own compensation packages. Other potential conflicts of interest include setting option performance targets, stock buybacks, (...) stock option resets and reloads, consolidations (mergers and acquisitions), and service on multiple boards. As trust is the most valuable commodity in a capitalist society, we suggest that these potential conflicts of interest and related outcomes may ultimately serve to erode any anticipated benefits of director stock compensation. (shrink)

Two obvious trends in corporate governance include broadening board accountability beyond shareholders’ interests and paying outside directors with equity compensation (stock and stock options). By integrating common agency and instrumental stakeholder theories, we examine the effect of stock compensation on secondary stakeholders and a firm’s participation in social issues, two areas where interests are less aligned with shareholder value. Consistent with our predictions, we found that while stock compensation may be an effective way to align directors’ (...) goals to those of shareholders, it has adverse effects on important non-shareholder constituencies in the company’s operating environment. (shrink)

Islamic banking, based on the prohibition of interest, is well established throughout the Muslim world. Attention has now turned towards applying Islamic principles in equity markets. The search for alternatives to Western style markets has been given added impetus in Muslim countries by the turmoil in Asian financial markets in 1997. Common stocks are a legitimate form of instrument in Islam, but many of the practices associated with stock trading are not. In this paper the instruments traded and the (...) structure and practices of stock markets are examined from an Islamic perspective. Speculation is not acceptable in Islam and measures would have to be taken to control speculative trading. In addition short selling and margin trading are severely restricted. The use of stock index and equity futures and options are also unlikely to be acceptable within an Islamic market. Regulatory authorities in Muslim countries will therefore find a vast array of problems in attempting to structure a trading system that will be acceptable. (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)

High-profile corporate scandals earlier in this decade provoked outrage and legislative action; however, corporate executive-level ethical lapses continue to come to light. This article examines the work of Professor Dunfee and his coauthors on corruption, ethical leadership, and social contracts theory, and relates that literature to corrupt activities by corporate executives. Corruption is defined broadly to encompass executive self-dealing, which harms their firms. The specific example of stock options backdating is used to show the harmful impact on shareholders and (...) the lack of managerial integrity though consequentialist, deontological, and legal analysis, as well as a critique of the practice using social contracts principles. Ultimately, this article utilizes the insights of Dunfee and his coauthors, and the lessons from the backdating example, to propose a framework aimed at improving corporate governance and preventing future executive corruption. The framework includes a strategy of identification and prevention, employing detection and eradication mechanisms, and institutional learning from past instances of corporate corruption. (shrink)

The foremost aim of this research was to forecast the performance of three stock market indices using the multilayer perceptron, recurrent neural network, and autoregressive integrated moving average on historical data. Moreover, we compared the extrapolative abilities of a hybrid of ARIMA with MLP and RNN models, which are called ARIMA-MLP and ARIMA-RNN. Because of the complicated and noisy nature of financial data, we combine novel machine-learning techniques such as MLP and RNN with ARIMA model to predict the three (...) stock market data. The data used in this study are taken from the Pakistan Stock Exchange, National Stock Exchange India, and Sri Lanka Stock Exchange. In the case of Pakistan, the findings show that the ARIMA-MLP and ARIMA-RNN beat the individual ARIMA, MLP, and RNN models in terms of accuracy. Similarly, in the case of Sri Lanka and India, the hybrid models show more robustness in terms of forecasting than individual ARIMA, MLP, and RNN models based on root-mean-square error and mean absolute error. Apart from this, ARIMA-MLP outperformed the ARIMA-RNN in the case of Pakistan and India, while in the context of Sri Lanka, ARIMA-RNN beat the ARIMA-MLP in forecasting. Our findings reveal that the hybrid models can be regarded as a suitable option for financial time-series forecasting. (shrink)

Performance-contingent compensation by means of stock options may induce risk-taking in agents that is excessive from the point of view of the company or the shareholders. We test whether increasing shareholder control may be an effective checking mechanism to rein in such excessive risk-taking. We thus tell one group of experimental CEOs that they may have to justify their decision-making processes in front of their shareholders. This indeed reduces risk-taking and increases the performance of the companies they manage. Implications (...) are discussed. (shrink)

In this chapter, I pursue two aims. Firstly, I propose an original survey and analysis of the way proponents of 4E cognition have until now defined the relations between normativity and cognitive science. A first distinction is made between making normativity an explanandum of 4E cognitive science, and turning normativity into a property or part of the explanantia of 4E cognitive science. Inside of the latter option, one must distinguish between methodological, ontological and semantic claims on the value of (...) normativity for studying and defining cognitive phenomena. The second aim of the paper consists in developing the further claim that normativity is an essential property of daily intentional concepts and of scientific concepts. I show how 4E cognition might further develop this latter claim in the context of recent debates about cognitive ontologies in neuroscience. (shrink)

Recent scandals allegedly linked to CEO compensation have brought executive compensation and perquisites to the forefront of debate about constraining executive compensation and reforming the associated corporate governance structure. We briefly describe the structure of executive compensation, and the agency theory framework that has commonly been used to conceptualize executives acting on behalf of shareholders. We detail some criticisms of executive compensation and associated ethical issues, and then discuss what previous research suggests are likely intended and unintended consequences of some (...) widely proposed executive compensation reforms. We explicitly discuss the following recommendations for reform: require greater independence of compensation committees, require executives to hold equity in the corporation, require greater disclosure of executive compensation, increase institutional investor involvement in corporate governance (including executive compensation), and require firms to expense stock options on their income statements. We provide a brief summary discussion of ethical issues related to executive compensation, and describe possible future research. (shrink)

Identity Economics provides an important and compelling new way to understand human behavior, revealing how our identities--and not just economic incentives--influence our decisions. In 1995, economist Rachel Kranton wrote future Nobel Prize-winner George Akerlof a letter insisting that his most recent paper was wrong. Identity, she argued, was the missing element that would help to explain why people--facing the same economic circumstances--would make different choices. This was the beginning of a fourteen-year collaboration--and of Identity Economics. The authors explain how our (...) conception of who we are and who we want to be may shape our economic lives more than any other factor, affecting how hard we work, and how we learn, spend, and save. Identity economics is a new way to understand people's decisions--at work, at school, and at home. With it, we can better appreciate why incentives like stock options work or don't; why some schools succeed and others don't; why some cities and towns don't invest in their futures--and much, much more. Identity Economics bridges a critical gap in the social sciences. It brings identity and norms to economics. People's notions of what is proper, and what is forbidden, and for whom, are fundamental to how hard they work, and how they learn, spend, and save. Thus people's identity--their conception of who they are, and of who they choose to be--may be the most important factor affecting their economic lives. And the limits placed by society on people's identity can also be crucial determinants of their economic well-being. (shrink)

Identity Economics provides an important and compelling new way to understand human behavior, revealing how our identities--and not just economic incentives--influence our decisions. In 1995, economist Rachel Kranton wrote future Nobel Prize-winner George Akerlof a letter insisting that his most recent paper was wrong. Identity, she argued, was the missing element that would help to explain why people--facing the same economic circumstances--would make different choices. This was the beginning of a fourteen-year collaboration--and of Identity Economics. The authors explain how our (...) conception of who we are and who we want to be may shape our economic lives more than any other factor, affecting how hard we work, and how we learn, spend, and save. Identity economics is a new way to understand people's decisions--at work, at school, and at home. With it, we can better appreciate why incentives like stock options work or don't; why some schools succeed and others don't; why some cities and towns don't invest in their futures--and much, much more. Identity Economics bridges a critical gap in the social sciences. It brings identity and norms to economics. People's notions of what is proper, and what is forbidden, and for whom, are fundamental to how hard they work, and how they learn, spend, and save. Thus people's identity--their conception of who they are, and of who they choose to be--may be the most important factor affecting their economic lives. And the limits placed by society on people's identity can also be crucial determinants of their economic well-being. (shrink)

We explore the extent to which Boards use executive compensation to incite firms to act in accordance with social and environmental objectives (e.g., Johnson, R. and D. Greening: 1999, Academy of Management Journal 42(5), 564-578; Kane, E. J.: 2002, Journal of Banking and Finance 26, 1919-1933.). We examine the association between executive compensation and corporate social responsibility (CSR) for 77 Canadian firms using three key components of executives' compensation structure: salary, bonus, and stock options. Similar to prior research (McGuire, (...) J., S. Dow and K. Argheyd: 2003, Journal of Business Ethics 45(4), 341-359), we measure three different aspects of CSR, which include Total CSR as well as CSR Strengths and CSR Weaknesses. CSR Strengths and CSR Weaknesses capture the positive and negative aspects of CSR, respectively. We find significant positive relationships between: (1) Salary and CSR Weaknesses, (2) Bonus and CSR Strengths, (3) Stock Options and Total CSR; and (4) Stock Options and CSR Strengths. Our findings suggest the importance of the structure of executive compensation in encouraging socially responsible actions, particularly for larger Canadian firms. This in turn suggests that executive compensation can be an effective tool in aligning executives' welfare with that of the "common good", which results in more socially responsible firms (Bebchuk, L., J. Fried and D. Walker: 2002, The University of Chicago Law Review 69, 751-846; Zalewski, D.: 2003, Journal of Economic Issues 37(2), 503-509). In addition, our findings suggest the importance of institutional context in influencing the association between executive compensation and CSR. Further implications for practice and research are discussed. (shrink)

Rather than the art of putting forward logically valid arguments leading to Truth, argumentation is here viewed as the use of verbal means ensuring an agreement on what can be considered reasonable by a given group, on a more or less controversial matter. What is acceptable and plausible is always coconstructed by subjects engaging in verbal interaction. It is the dynamism of this exchange, realized not only in natural language, but also in a specific cultural framework, that has to be (...) accounted for. From this perspective, it is not enough to reconstruct patterns of reasoning. As logos is by definition both Reason and Language, abstract schemata have to be examined in their verbal realization in a given situation of discourse. Such an approach to arguments allows for a “thick” description taking into account their discursive and communicational aspects, as well as argumentation’s constitutive dialogism and its inscription in a set of common representations, opinions and beliefs (a doxa). This approach, exemplified by the analysis of a short text on stock options borrowed from the French newspaper Libération, is an attempt at establishing a dialogue between disciplines like argumentation theories, rhetorical criticism and discourse analysis. (shrink)

In the 1990s, the role of the chief executive officer (CEO) of major United States corporations underwent a profound transformation in which CEOs went from being bureaucrats or technocrats to shareholder partisans who acted more like proprietors or entrepreneurs. This transformation occurred in response to changes in the competitive environment of U.S. corporations and also to the agency theory argument that high levels of compensation by means of stock options helped to overcome the agency problem inherent in the separation (...) of ownership and control. Some critics charge that this new CEO role is objectionable for a variety of reasons, which may also be applicable to the current financial crisis in which CEO misconduct may have played a part. These objections are based largelyon a team production model of corporate governance, which is held by these critics to be superior to the standard agent-principal model. This article examines the objections offered by critics of the changed role of the CEO and argues that their negative assessment of this development and their use of the team production model to support their conclusions are not warranted. CEOs have changed from hired hands to co-owners, and this change may have contributed in some measure to the current financial crisis. However, in determining the morally preferable role of the CEO, care must be taken not to discard what is sound in the changed role. (shrink)

This paper examines ethical issues involved in the mass marketing of securities to individuals. The marketing of products deemed “socially questionable” or “sinful” (like tobacco and alcohol) has long been recognized as posing special ethical challenges (Kotler, P. and S. Levy: 1971, Harvard Business Review 49, 74–80; Davidson, D. K: 1996, Selling Sin: The Marketing of Socially Unacceptable Products (Quorum Press, Westport). We contend that marketers should consider securities (i.e. common stock, options) in a similar vein, as a potentially (...) dangerous product. Given the inherent volatility of equity prices, responsible marketers need to exercise caution and restraint in promoting securities. We evaluate whether the NYSE’s current guidelines adequately encourage ethical marketing practices and deter unethical ones. Using recent examples of controversial brokerage advertisements, we expose weaknesses in the Exchange’s vague injunction that members not “mislead” reasonable people by making “exaggerated claims” in their communications. From a moral perspective, we find it troublesome that intentionality need not be present for a promotion to be considered misleading. Also problematic is the continued invocation of the reasonable person standard to judge the propriety of advertisements. We close with some thoughts on improving the quality of securities marketing. We suggest that the NYSE, in the interests of fostering higher ethical behavior among member marketers, may need to revive a marketing code of conduct prevalent on Wall Street in an earlier era. (shrink)

Managers and others have long debated the merits of different reward systems, such as piecework, hourly rates, bonuses, stock options, and the like. They have usually focused on the efficiency of these systems, but they have also had to consider their side effects on relationships, trust, and calls for fair treatment. Such debates local to every organisation play out the issues of rewards and equity in market-based societies as a whole. This paper examines the concept of equity in the (...) distribution of resources in a society of capitalists. It begins with a discussion of the nature of individual capitalism in modern societies. Then, using production and consumption as the two basic functions of a society, it presents a schema for analysing equity. It concludes with a suggestion for overcoming income inequity. (shrink)

We examine market reactions to the stock options backdating scandal in a slightly unusual way, but focusing on firms who were not perceived to have had a backdating concern, but were instead linked to firms who did have a backdating concern. These linkages can be found via board interlocks and the roles those directors perform. In addition we examine the linkages which occur from shared professional services firms, such as auditors and outside legal counsel. That these potential conduits are (...) available is not in question, but rather, do investors perceive the conduits are used to pass along information about backdating stock options? We then ask if affiliation with dominant audit and legal services firms ameliorates or exacerbates those investor market reactions. We find that firms linked to the scandalized firms also face negative reactions, which are worsened when they also are serviced by professional services firms who are themselves are also linked to the managerial practice. (shrink)

We draw on the behavioral agency model to explore the ethical consequences of CEO equity incentives. We argue that CEOs are more concerned with funding pension plans when they have more to gain from their stock options yet will increasingly underfund employee pension funds as their current option wealth increases. Our findings reveal that both effects hold when the CEO has greater power (also occupying board chair) over firm decision making. Our study suggests that there is an ethical (...) dimension to equity incentives, given they are intended to align CEO interests with shareholders, yet potentially incentivize CEO behaviors with adverse consequences for employees. Insights from our findings provide boards and regulators with behavioral levers to protect employee well-being in the context of pension funding. (shrink)

This study investigates the effect of each component of CEO compensation, including cash-based component (salary and bonus), equity-based component (stock grant and stock option), and other perks on disclosure of corporate social responsibility (CSR) information of global firms. The study uses 2SLS IV estimation method and a sample of 580 US-based firms in a seven-year period. The study finds that equity-based remuneration has a significant and positive impact on a firm's CSR disclosure while CEO salary, bonus, and (...) other perquisites have significant detrimental effects on CSR disclosure. The paper indicates that a CEO's motivation for CSR reporting might arise from stock grant and option; meanwhile, salary, bonus and other perks could demotivate the CEO in this regard. Our findings offer insight into designing CEO compensation packages to meet shareholders' interests and stakeholders' expectations for a sustainable business. (shrink)

This article introduces the special issue on “Corporate Reputation: Being Good and Looking Good.” Three of the five included articles help to reinforce a conclusion that “being good” and “looking good” are not dichotomous, mutually exclusive conditions. Rather, the two dimensions are linked in some kind of causal relationship for which continuing conceptual and empirical research is desirable. A fourth article concerns the reputational effects of the stock-option backdating scandal. The fifth article offers a critique of conventional approaches (...) to defining and measuring reputation. (shrink)

Fraud, speculative bubbles and collapse, plus the resulting bankruptcies and hard times are a continuing part of the corporate environment. The 21st century is no exception, and its first decade has seen more than its share of abuse. This is somewhat surprising, given the level of regulation and oversight required. The focus here is primarily on Enron as a microcosm of all that can go wrong in a sophisticated, high-tech environment. Enron represents the long-term use of greed based primarily on (...) executive compensation incentives; poor corporate governance; executives willing to break the law or overlook others who did; the use of political lobbying; plus accommodating auditors, attorneys, analysts and regulators. Other fraud and abuse cases considered include WorldCom, Tyco, and Adelphi. In addition, the widespread corruption associated with the stock options scandals and the current housing collapse/banking crisis are reviewed, suggesting that the massive regulatory effort of Sarbanes-Oxley and other reforms have not solved the underlying problems. (shrink)

Cet article constitue la réponse à une note critique publiée dans le n° 71 d’ Actuel Marx, dans laquelle Fabien Foureault discutait les travaux de G. Duménil et D. Lévy concernant l’actuelle transition entre le capitalisme et un nouveau mode de production, le managérialisme. Le premier argument est le fait que les hauts managers sont rétribués par la distribution de stock-options, considérés comme des revenus du capital par Foureault bien que ces options n’aient pas de rapport avec la détention (...) antérieure d’actions par les bénéficiaires. La forme de la rémunération l’emporte sur les pratiques qui la motivent. Foureault utilise, par ailleurs, les calculs réalisés au sein des Distributional National Accounts qui montrent que la part des revenus du capital au sein du revenu total du 1 % supérieur de la hiérarchie des revenus n’a pas décru. Ces nouvelles estimations sont, pour GD et DL, inutilisables hors des finalités comparatives pour lesquelles elles ont été conçues. Enfin, les auteurs considèrent que Foureault se méprend radicalement quant à la nature de leurs interprétations politiques. (shrink)

Governing boards utilize executive compensation contracts in an attempt to align executive actions with corporate goals. The objective is to ensure that executive performance provides value to the organization in terms of successful outcomes. A key performance criteria typically specified in CEO compensation contracts is earnings targets. However, using earnings as a performance evaluation may be problematic because some firms exhibit robust and sustained earnings over time (high earnings persistence), and other firms, such as high growth oriented firms, exhibit weak (...) or sometimes negative earnings over time (low earnings persistence). Our study reveals that the effect of high earnings persistence results in firms that focus more heavily on cash compensation (salary and bonus) rather than on equity compensation (stock options, etc.) to compensate executive performance. Additionally, for firms characterized by low earnings persistence, our study indicates that cash flows from operations act as a supplementary performance measure to accounting earnings, and become increasingly important as a means to justify executive cash compensation. (shrink)

This case study highlights some of the latest research on setting executive compensation at ethical levels. The board of directors of Spade’s, a mid-size U.S. hardware chain, considers altering the pay package of its incoming CEO to best align his interests with those of shareholders and stakeholders. Students are invited to consider various options on current trends, which seem attractive and convincing on the surface, but might present certain risks over the longer term. Five compensation components are analyzed, namely, salary (...) capping, pay for performance, bonus scales, stock option parameters, and severance package. (shrink)

This article embarks on ethical trade-offs at the sustainability/finance interface by contrasting shareholders’ interest in short-term financial returns with society’s interest in counteracting ecological and social grievances. Scrutinizing share repurchases, we investigate a firm’s communicated sustainability orientation (i.e., its environmental and social value orientation) as well as its environmental and social sustainability performance. Our results are based on a large-scale panel dataset of 491 U.S. firms observed from 2004 to 2016. The dataset combines share buyback data with sustainability orientation scores (...) from shareholder letters and sustainability performance ratings. The econometric models suggest no association between social value orientation and repurchase volumes, but a significantly negative relationship between environmental value orientation and buybacks in a cubic form. Executive stock options partially attenuate this relationship. Share repurchases in turn negatively affect future environmental and social performance. This study grasps the consequences of firms’ short-term shareholder satisfaction and discusses its ethical implications in the context of firms’ contribution to sustainable development, thereby providing important insights to the business ethics discourse. (shrink)

The debate over compensation packages for top executives is discussed. Particular emphasis is placed on the decoupling of CEO pay and organizational performance. A contrast is drawn between firms that are owner-controlled and those that are manager-controlled. Owner-controlled firms tend to be more market-driven. In manager-controlled firms, however, ownership can become diluted to the point where decisions may not always be in the best interest of shareholders. The process of determining CEO compensation packages is examined, and special attention is given (...) to the handling of stock options. In order to stem the threat of increased government intervention, suggestions are made for increasing the leverage of compensation committees and of shareholders in general. (shrink)

The controversial issue of whether Chief Executive Officer (CEO) compensation is excessive or appropriate is examined in terms of two competing claims: that CEOs are overpaid for the value they provide to an enterprise, and that CEO compensation is inherently equitable. Various arguments and perspectives on both sides of the issue are assessed. Little evidence supports the claim that CEO performance justifies very high compensation. Further, the complex interactive alliance between boards of directors and CEOs compromises rational decision-making about CEO (...) compensation, with the Enron affair offered as an illustration of what can go wrong when dishonest CEO actions combine with lax board oversight. Recommendations for restoring trust in the system include continuing current regulatory actions, using different metrics for determining CEO compensation, making board member-CEO relationships transparent to all company stakeholders, and several more radical ideas for change. Stakeholders must resist being distracted by other social, economic, or political issues from pursuing serious, lasting reform. (shrink)

By employing the theoretical template provided by agency theory, this article contributes a detailed clinical analysis of a large multinational Canada-headquartered telecommunications company, Nortel. Our analysis reveals a twenty-first century norm of usual suspects: a CEO whose compensation is well above those of his peers, a dysfunctional board of directors, acts of income smoothing to preserve the confidence of volatile investors, and revelations of financial irregularities followed by a downfall. In many ways, the spectacular rise and – sudden – fall (...) of Nortel illustrates excesses of actors within, and contradictions of the system of corporate governance implied by the agency model. Furthermore, this case illustrates limitations of the agency framework in complex situations with short-term oriented investors. (shrink)

This first edition of this book was a broad study, drawing on a wide range of published research and historical evidence, of the enormous stock market boom that started around 1982 and picked up incredible speed after 1995. Although it took as its specific starting point this ongoing boom, it placed it in the context of stock market booms generally, and it also made concrete suggestions regarding policy changes that should be initiated in response to this and other (...) such booms. The book argued that the boom represents a speculative bubble, not grounded in sensible economic fundamentals. Part one of the book considered structural factors behind the boom. A list of twelve precipitating factors that appear to be its ultimate causes was given. Amplification mechanisms, naturally-occurring Ponzi processes, that enlarge the effects of these precipitating factors, were described. Part Two discussed cultural factors, the effects of the news media, and of "new era" economic thinking. Part Three discussed psychological factors, psychological anchors for the market and herd behavior. Part Four discussed attempts to rationalize exuberance: efficient markets theory and theories that investors are learning. Part Five presented policy options and actions that should be taken. The second edition, 2005, added an analysis of the real estate bubble as similar to the stock market bubble that preceded it, and warned that "Significant further rises in these markets could lead, eventually, to even more significant declines. The bad outcome could be that eventual declines would result in a substantial increase in the rate of personal bankruptcies, which could lead to a secondary string of bankruptcies of financial institutions as well. Another long-run consequence could be a decline in consumer and business confidence, and another, possibly worldwide, recession." Thus, the second edition of this book was among the first to warn of the global financial crisis that began with the subprime mortgage debacle in 2007. (shrink)

>With assets of over US$1.0 trillion and growing, public pension funds in the United States have become a major force in the private sector through their holding of equity positions in large publicly traded corporations. More recently, these funds have been expanding their investment strategy by considering a corporations long-term risks on issues such as environmental protection, sustainability, and good corporate citizenship, and how these factors impact a companys long-term performance. Conventional wisdom argues that the fiduciary responsibility of the pension (...) funds trustees must be solely focused on their beneficiaries and, therefore, their investment criteria must be based strictly on narrowly defined financial measures. It is also asserted that well-established financial measurements of corporate performance already include long-term risk assessment through discounted present value of future flow of earnings. Consequently, all other criteria are contrary to the best interest of the pension funds beneficiaries. In this paper, we assert that, contrary to conventional wisdom, pension funds, and for that matter other mutual funds, must be concerned with the long-term survival and growth of corporations. These measures are generally referred to socially responsible investing (SRI) and when applied to corporations, it is termed socially responsible corporate conduct (SRCC). We demonstrate that current measurement of future risk assessment invariably understates, and quite often completely overlooks, these long-term risks because of the inherent bias towards short-run on the part of financial intermediaries whose compensation depends greatly on short-term results. Furthermore, there is ample evidence to suggest that these intermediaries have been engaging in self-serving practices and thus failing in their duties to serve their clients, i.e. pension funds, best interests. Because of their large holdings in the total market as well as individual companies, these funds cannot easily divest from poorly performing companies without destabilizing the companies stock and overall markets. Hence, they must opt for a strategy of emphasizing investment criteria that encourage companies to take into account long-term aspects of their operations in terms of their impact on environment, sustainability, and community welfare, to name a few. We argue that an exclusionary, and even a primary, focus on short-term financial criteria is no longer a viable option. It also calls for the pension funds to encourage greater transparency and accountability of the entire corporate sector through improved corporate governance. Thus socially responsible investing practices are not merely discretionary and desirable activities; they are a necessary imperative, which both the corporations and public pension funds, and other large institutional holders, will ignore at serious peril to themselves. Finally, the paper considers some of the recent developments where corporations have been responding to these challenges and how their actions might be strengthened through greater disclosure and transparency of corporate activities. It also makes recommendations for the pension funds to support further research in creating new measurement standards that further refine the concept of socially responsible investing as a necessary ingredient of long-term corporate survival and growth in the context of a changing economic, environmental and socio-political dynamic. (shrink)

With assets of over US$1.0 trillion and growing, public pension funds in the United States have become a major force in the private sector through their holding of equity positions in large publicly traded corporations. More recently, these funds have been expanding their investment strategy by considering a corporation's long-term risks on issues such as environmental protection, sustainability, and good corporate citizenship, and how these factors impact a company's long-term performance. Conventional wisdom argues that the fiduciary responsibility of the pension (...) funds' trustees must be solely focused on their beneficiaries and, therefore, their investment criteria must be based strictly on narrowly defined financial measures. It is also asserted that well-established financial measurements of corporate performance already include long-term risk assessment through discounted present value of future flow of earnings. Consequently, all other criteria are contrary to the best interest of the pension funds' beneficiaries. In this paper, we assert that, contrary to conventional wisdom, pension funds, and for that matter other mutual funds, must be concerned with the long-term survival and growth of corporations. These measures are generally referred to "socially responsible investing" and when applied to corporations, it is termed "socially responsible corporate conduct." We demonstrate that current measurement of future risk assessment invariably understates, and quite often completely overlooks, these long-term risks because of the inherent bias towards short-run on the part of financial intermediaries whose compensation depends greatly on short-term results. Furthermore, there is ample evidence to suggest that these intermediaries have been engaging in self-serving practices and thus failing in their duties to serve their clients', i.e. pension funds', best interests. Because of their large holdings in the total market as well as individual companies, these funds cannot easily divest from poorly performing companies without destabilizing the companies' stock and overall markets. Hence, they must opt for a strategy of emphasizing investment criteria that encourage companies to take into account long-term aspects of their operations in terms of their impact on environment, sustainability, and community welfare, to name a few. We argue that an exclusionary, and even a primary, focus on short-term financial criteria is no longer a viable option. It also calls for the pension funds to encourage greater transparency and accountability of the entire corporate sector through improved corporate governance. Thus socially responsible investing practices are not merely discretionary and desirable activities; they are a necessary imperative, which both the corporations and public pension funds, and other large institutional holders, will ignore at serious peril to themselves. Finally, the paper considers some of the recent developments where corporations have been responding to these challenges and how their actions might be strengthened through greater disclosure and transparency of corporate activities. It also makes recommendations for the pension funds to support further research in creating new measurement standards that further refine the concept of socially responsible investing as a necessary ingredient of long-term corporate survival and growth in the context of a changing economic, environmental and socio-political dynamic. (shrink)

This work presents a stock/effort model describing both harvested fish population and fishing effort dynamics. The fishing effort dynamic is controlled by investment which corresponds to the revenue proportion generated by the activity. The dynamics are subject to a set of economic and biological state constraints. The analytical study focuses on the compatibility between state constraints and controlled dynamics. By using the mathematical concept of viability kernel, we reveal situations and management options that guarantee a sustainable system.

In recent literature, it has become clear that quantum physics does not refute Humeanism: Lewis’s thesis of Humean supervenience can be literally true even in the light of quantum entanglement. This point has so far been made with respect to Bohm’s quantum theory. Against this background, this paper seeks to achieve the following four results: to generalize the option of quantum Humeanism from Bohmian mechanics to primitive ontology theories in general; to show that this option applies also to (...) classical mechanics; to establish that it requires a commitment to matter as primitive stuff, but no commitment to natural properties ; to point out that by removing the commitment to properties, the stock metaphysical objections against Humeanism from quidditism and humility no longer apply. In that way, quantum physics strengthens Humeanism instead of refuting it. (shrink)

This paper is the first phase of a longitudinal study of the class of 2014 on the effectiveness of ethics education at a business university. This phase of the project establishes the baseline attributes of incoming college freshmen with a pretest of the students’ ethical proclivity as measured by Defining Issues Test (DIT-2) scores. The relationship between the students’ ethical reasoning and their behavior in experimental stock trading sessions is then examined. In the trading simulations, randomly selected students were (...) provided with the option of receiving privileged insider information about the final payoff of several stocks. The students could either accept or reject such information, with acceptance considered illegal insider trading. The results of the pretest indicate that moral reasoning as measured by the DIT-2 is related to insider trading behavior, with students with higher DIT-2 scores being less likely to accept insider information. The paper also presents demographic differences across DIT-2 scores and trading behavior as a foundation for the longitudinal examination of changes in students’ moral cognition characteristics and behavior during their undergraduate career. (shrink)

Featuring an exceptionally clear writing style and a wealth of real-world examples and exercises, Logic, Second Edition, shows how logic relates to everyday life, demonstrating its applications in such areas as the workplace, media and entertainment, politics, science and technology, student life, and elsewhere.Thoroughly revised and expanded in this second edition, the text now features 2600 exercises, more than 1000 of them new; three new chapters on legal arguments, moral arguments, and analyzing a long essay; enhanced pedagogy; and much more.FEATURES* (...) 2600 exercises--more than 1000 of them new--breathe new life into logic* Real-world examples help bring logic down to earth for students* A unique, extended explanation or model of the answer to the first question of each "Check Your Understanding" section shows students what is expected of their answers* An additional 25% of the exercises are answered at the back of the book* "Profiles in Logic" provide short sketches of logicians, philosophers, mathematicians, and others associated with logic* "Logic Challenge" problems present puzzles and paradoxes that end each chapter on a fun note* Additional pedagogical elements--marginal definitions, key terms, a glossary, reference boxes, and bulleted chapter summaries--make the material even more accessible* Detailed guides help students learn to create "truth tables" and Venn diagramsSUPPORT PACKAGEAn Instructor's Manual with Computerized Test Bank on CD includes: Solutions to all exercises in the book, enhanced by explanations and answers that elucidate the details of the correct answersKey Terms and a summary for each chapterA customizable Computerized Test Bank--with multiple-choice, true/false, and fill-in-the-blank questions--that allows instructors to give exams or homework problems that can be auto-gradedA traditional "pencil-and-paper" Test Bank and answer key containing the same questions as the Computerized Test BankPowerPoint-based lecture outlinesThe Instructor's Manual with Computerized Test Bank and the traditional Test Bank are also available in printed format.A Companion Website offers:Instructor Resources :A downloadable version of the Instructor's Manual PowerPoint-based lecture outlinesStudent Resources:Brief chapter summariesInteractive Flash Cards with key terms and definitionsWeb links and other media resourcesPractice quizzes with answers and explanations The Learning Management System Cartridges include, in a fully downloadable format:Instructor's Manual and Computerized Test Bank Student material from the companion websiteThe Perfect Text for Your Course... No Matter How You Teach ItYour course is unique; you have your own teaching philosophy and style. Whether you teach traditional Introduction to Logic, Critical Thinking/Informal Logic, or Formal Logic, Baronett: Logic, Second Edition, can be tailored to fulfill your course needs.We'll make it easy for you; choose one of our Alternate Editions or build the book you want, chapter by chapter.Option 1. Author Stan Baronett has suggested four Alternate Editions that may work for you. Each Alternate Edition comes in full color, with answers to problems, a full glossary, and an index. The books are in stock and available for ordering. Please see the ISBN information below.Logic: Concise EditionChapters 1, 3, 4, 5, 6, 7, 8Order using ISBN: 978-0-19-994129-2Logic: An Emphasis on Critical Thinking and Informal LogicChapters 1, 2, 3, 4, 10, 11, 12, 13 A-E, 14, 15Order using ISBN: 978-0-19-994128-5Logic: An Emphasis on Formal LogicChapters 1, 5, 6, 7, 8, 9Order using ISBN: 978-0-19-994126-1Logic: With Diagramming used in Chapter 4. Informal FallaciesFull textOrder using ISBN: 978-0-19-997081-0Option 2. Create your own customized textbook by choosing the specific chapters that you need for your course. Please contact your Oxford University Press Sales Representative or call 800.280.0280 for details. (shrink)

This guide accompanies the following article: Matthew Kieran, ‘Art, Morality and Ethics: On the (Im)moral Character of Art Works and Inter‐Relations to Artistic Value’. Philosophy Compass 1/2 (2006): pp. 129–143, doi: 10.1111/j.1747‐9991.2006.00019.x Author’s Introduction Up until fairly recently it was philosophical orthodoxy – at least within analytic aesthetics broadly construed – to hold that the appreciation and evaluation of works as art and moral considerations pertaining to them are conceptually distinct. However, following on from the idea that artistic value is (...) broader than aesthetic value, the last 15 years has seen an explosion of interest in exploring possible inter‐relations between the appreciative and ethical character of works as art. Consideration of these issues has a distinguished philosophical history but as the Compass survey article suggests (‘Art, Morality and Ethics: On the (Im)Moral Character of Art Works and Inter‐Relations to Artistic Value.’Philosophy Compass 1.2 (2006): 129–43), it is only very recently that figures in the field have returned to it to develop more precisely what they take the relationships to be and why. Consensus is, unsurprisingly, lacking. The reinvigoration of the issues has led sophisticated formalists or autonomists to mount a more considered defence of the idea that aesthetic and literary values are indeed conceptually distinct from the justification or otherwise of the moral perspective or views endorsed in a work (Topic I). The challenges presented by such a defence are many but amongst them are appeals to critical practice (Lamarque and Olsen), scepticism about whether or not art really can give us bona fide knowledge (Stolnitz) and the recognition that truth often seems to be far removed from what it is we value in our appreciation of works (Lamarque). One way to motivate consideration of the relevance of a work’s moral character to its artistic value concerns the phenomena of imaginative resistance. At least sometimes it would seem that, as Hume originally suggested, we either cannot or will not enter imaginatively into the perspective solicited by a work due to its morally problematic character (Topic II). In some cases, it would seem that as a matter of psychological fact, we cannot do so since it is impossible for us to imagine how it could be that a certain attitude or action is morally permissible or good (Walton). The question then is whether or not this is a function of morality in particular or constraints on imaginative possibility more generally and what else is involved. At other times, the phenomena seem to be driven by a moral reluctance to allow ourselves to enter into the dramatic perspective involved (Moran) or evaluation of the attitude expressed (Stokes). Nonetheless, it is far from obvious that this is so of all the attitudes or responses we judge to be morally problematic. After all, it looks like we can and indeed often do suspend or background particular cognitive and moral commitments in engaging with all sorts of works (Nichols and Weinberg). If the moral character of a work interacts with how we appreciate and evaluate them, then the pressing question is this: is there any systematic account of the relationship available to us? One way is to consider the relationship between our emotional responses to works and their moral character (Topic III). After all, art works often solicit various emotional responses from us to follow the work and make use of moral concepts in so doing (Carroll). Indeed, whether or not a work merits the sought for emotional responses often seems to be internally related to ethical considerations (Gaut). Yet, it is not obvious that we should apply our moral concepts or respond emotionally in our imaginative engagement with works as art as we should in real life (Kieran, Jacobson). A different route is via the thought that art can convey knowledge (Topic IV). There might be particular kinds of moral knowledge art distinctively suited to conveying (Nussbaum) or it may just be that art does so particularly effectively (Carroll, Gaut, Kieran). Either way where this can be tied to the artistic means and appreciation of a work it would seem that to cultivate moral understanding contributes to the value of a work and to betray misunderstanding is a defect. Without denying the relevance of the moral character of a work some authors have wanted to claim that sometimes the immoral aspect of a work can contribute to rather than lessen its artistic value (Topic V). One route is to claim that there is no systematic theoretical account of the relationship available and what the right thing to say is depends on the particular case involved (Jacobson). Another involves the claim that this is so when the defect connects up in an appropriate way to one of the values of art. Thus, it has been claimed, only where a work reveals something which adds to intelligibility, knowledge or understanding in virtue of its morally problematic aspect can this be so (Kieran). The latter position looks like it could in principle be held whilst nonetheless maintaining that the typical or standard relationship is as the moralists would have it. Yet perhaps allowing valence change for such reasons is less a mark of principled explanation and more a function of downright inconsistency or incoherence (Harold). The topics themselves and suggested readings given below follow the structure articulated above as further amplified in the Compass survey article. The design and structure given below can be easily compressed or expanded further. Author Recommends 1 Carroll, Noël. ‘Art, Narrative and Moral Understanding.’Aesthetics and Ethics: Essay at the Intersection. Ed. Jerrold Levinson. Cambridge: Cambridge UP, 1998. 126–60. 2 This article develops the idea that engaging with narrative art calls on moral concepts and emotions and can thereby clarify our moral understanding. 2 Carroll, Noël. Beyond Aesthetics: Philosophical Essays. Cambridge: Cambridge UP, 2009. 4 Part IV consists of six distinct essays on questions concerning the inter‐relations between art and morality including the essay cited above and the author’s articulation and defence of moderate moralism. 3 Gaut, Berys. ‘The Ethical Criticism of Art.’Aesthetics and Ethics: Essay at the Intersection. Ed. Jerrold Levinson. Cambridge: Cambridge UP, 1998. 182–203. 4 Gaut, Berys. Art, Emotion and Ethics. Oxford: Oxford UP, 2007. 7 This monograph provides the most exhaustive treatment of the issues and defends the claim that, where relevant, whenever a work is morally flawed it is of lesser value as art and wherever it is morally virtuous the work’s value as art is enhanced. Chapters 7 and 8 defend concern ethical knowledge and chapter 10 is a development of the article cited above concerning emotional responses. Chapter 3 also gives a useful conceptual map of the issues and options in the debate. 5 Jacobson, Daniel. ‘In Praise of Immoral Art.’Philosophical Topics 25 (1997): 155–99. 9 A wide ranging and extended treatment of relevant issues which objects to generalising moral treatments of our responses to art works and defends the idea that particular works can be better because of rather than despite their moral defects. 6 Kieran, Matthew. ‘Forbidden Knowledge: The Challenge of Cognitive Immoralism.’Art and Morality. Ed. Sebastian Gardner and José Luis Bermúdez. London: Routledge, 2003. 56–73. 11 A general argument for immoralism is elaborated by outlining when, where and why a work’s morally problematic character can contribute to its artistic value for principled reasons (through enhancing moral understanding). 7 Kieran, Matthew. Revealing Art. London: Routledge, 2005. Chapter 4. 13 This chapter argues against both aestheticism and straightforward moralism about art, elaborating a defence of immoralism in relation to visual art whilst ranging over issues from pornographic art to the nature and demands of different genres in art. 8 Lamarque, Peter. ‘Cognitive Values in the Arts: Marking the Boundaries.’ Contemporary Debates in Aesthetics and the Philosophy of Art. Ed. Matthew Kieran. Oxford: Blackwell, 2006, 127–39. 15 This article concisely outlines and defends a sophisticated aestheticism that denies the importance of truth to artistic value. 9 Stolnitz, Jerome. ‘On the Cognitive Triviality of Art.’British Journal of Aesthetics 32.3 (1992): 191–200. 17 This article articulates and defends the claim that no knowledge of any interesting or significant kind can be afforded by works appreciated and evaluated as art. 10 Walton, Kendall. ‘Morals in Fiction and Fictional Morality, I.’Proceedings of the Aristotelian Society, Suppl. 68 (1994): 27–51. 19 This article builds on some comments from Hume to develop the idea that when engaging with fictions it seems impossible imaginatively to enter into radically deviant moral attitudes. Online Materials ‘Aesthetics and Ethics: The State of the Art.’American Society of Aesthetics online (Jeffrey Dean):. ‘Art, Censorship and Morality’ downloadable podcast of Nigel Warburton interviewing Matthew Kieran at Tate Britain (BBC/ou Open2.net as part of the Ethics Bites series):. ‘Art, Morality and Ethics: On the (Im)Moral Character of Art Works and Inter‐Relations to Artistic Value.’Philosophy Compass 1.2 (2006): 129–43 (Matthew Kieran):. ‘Ethical Criticism of Art.’Internet Encyclopedia of Philosophy (Ella Peek):. ‘Fascinating Fascism.’New York Review of Books Piece Discussing Leni Riefenstahl (Susan Sontag):. ‘The Beheading of St. John the Baptist (1450s), Giovanni de Paolo’ (Tom Lubbock):. Vladimir Nabokov and Lionel Trilling discuss Lolita (CBS):. Sample Syllabus Topic I Autonomism/aestheticism • Anderson, James C. and Jeffrey T. Dean. ‘Moderate Autonomism.’British Journal of Aesthetics 38.2 (1998): 150–66. • Beardsley, Monroe. Aesthetics: Problems in the Philosophy of Criticism. New York: Harcourt, Brace and World, 1958. Chapter 12. • Kant, Immanuel. The Critique of Judgement.Trans. James Creed Meredith. Oxford: Oxford UP, 1952 [1790]. • Lamarque, Peter. ‘Cognitive Values in the Arts: Marking the Boundaries.’Contemporary Debates in Aesthetics and the Philosophy of Art. Ed. Matthew Kieran. Oxford: Blackwell, 2006, 127–39. • ——. ‘Tragedy and Moral Value.’Australasian Journal of Philosophy 73.2 (1995): 239–49. • Lamarque, Peter and Stein Olsen. Truth, Fiction and Literature. Oxford: Clarendon Press, 1994. Chapter 10. • Stolnitz, Jerome. ‘On the Cognitive Triviality of Art.’British Journal of Aesthetics 32.3 (1992): 191–200. Topic II Imaginative Capacities, Intelligibility and Resistance • Moran, Richard. ‘The Expression of Feeling in Imagination.’Philosophical Review 103.1 (1994): 75–106. • Nichols, Shaun. ‘Just the Imagination: Why Imagining Doesn’t Behave Like Believing’. Mind & Language 21.4 (2006): 459–74. • Stokes, Dustin. ‘The Evaluative Character of Imaginative Resistance’. British Journal of Aesthetics 46.4 (2006): 387–405. • Tanner, Michael. ‘Morals in Fiction and Fictional Morality, II’. Proceedings of the Aristotelian Society, Suppl. Vol. 68 (1994): 51–66. • Walton, Kendall (1994). ‘Morals in Fiction and Fictional Morality, I’. Proceedings of the Aristotelian Society, Suppl. Vol. 68 (1994): 27–51. • Weinberg, Jonathan. ‘Configuring the Cognitive Imagination.’New Waves in Aesthetics. Eds. K. Stock and K. Thomson‐Jones. London: Palgrave Macmillan, 2008. 203–23. Topic III Moralism and Emotions • Carroll, Noël. ‘Moderate Moralism.’British Journal of Aesthetics 36.3 (1996): 223–37. • Carroll, Noël. ‘Art, Narrative and Moral Understanding.’Aesthetics and Ethics: Essay at the Intersection. Ed. Jerrold Levinson. Cambridge: Cambridge UP, 1998.126–60. • Gaut, Berys. Art, Emotion and Ethics. Oxford: Oxford UP, 2007. Chapter 10. • ——. ‘The Ethical Criticism of Art.’Aesthetics and Ethics: Essay at the Intersection. Ed. Jerrold Levinson. Cambridge: Cambridge UP, 1998. 182–203. • Hume, David. ‘Of the Standard of Taste.’Selected Essays. Oxford: Oxford UP, 1993 [1757]. 133–53. • Kieran, Matthew. ‘Emotions, Art and Immorality.’Oxford Handbook to the Philosophy of Emotions. Ed. Peter Goldie. Oxford: Oxford UP, 2009. 681–703. • Tolstoy, Leo. What is Art?. London: Penguin, 2004. Chapters 5 and 15. Topic IV Moralism and Knowledge • Aristotle. Poetics. Trans. M. Heath. London: Penguin, 1996 [367–322 BC]. • Carroll, Noël. ‘The Wheel of Virtue: Art, Literature and Moral Knowledge.’Journal of Aesthetics and Art Criticism 60.1 (2002): 3–26. • Gaut, Berys. Art, Emotion and Ethics. Oxford: Oxford UP, 2007. Chapters 7 and 8. • Gaut, Berys. ‘Art and Cognition.’Contemporary Debates in Aesthetics and the Philosophy of Art. Ed. Matthew Kieran. Oxford: Blackwell, 2006. 115–26. • Kieran, Matthew. ‘Art, Imagination and the Cultivation of Morals.’Journal of Aesthetics and Art Criticism 54.4 (1996): 337–51. • Nussbaum, Martha. ‘Finely Aware and Richly Responsible: Literature and the Moral Imagination.’Love’s Knowledge. New York: Oxford UP, 1990. 148–68. • Plato. The Republic. Trans. D. Lee. Harmondsworth: Penguin, 1974. Book 10. Topic V Immoralist Contextualism • Harold, James. ‘Immoralism and the Valence Constraint.’British Journal of Aesthetics 48.1 (2008): 45–64. • Jacobson, Daniel. ‘In Praise of Immoral Art.’Philosophical Topics 25 (1997): 155–99. • ——. ‘Ethical Criticism and the Vices of Moderation.’Contemporary Debates in Aesthetics and the Philosophy of Art. Ed. Matthew Kieran. Oxford: Blackwell, 2006. 342–55. • John, Eileen. ‘Artistic Value and Moral Opportunism.’Contemporary Debates in Aesthetics and the Philosophy of Art. Ed. Matthew Kieran. Oxford: Blackwell, 2006. 331–41. • Kieran, Matthew. ‘Forbidden Knowledge:The Challenge of Cognitive Immoralism.’Art and Morality. Ed. Sebastian Gardner and José Luis Bermúdez. London: Routledge, 2003. 56–73. • Kieran, Matthew. Revealing Art. London: Routledge, 2005. Chapter 4. • Patridge, Stephanie. ‘Moral Vices as Artistic Virtues: Eugene Onegin and Alice.’Philosophia 36.2 (2008): 181–93. Focus Questions 1 What is the strongest argument for the claim that the moral character of a work is not relevant to its artistic value? Does artistic or literary criticism tend to concern itself with the truth or morality of works? If so, in what ways? If not, why do you think this is? 2 What different explanations might there be for difficulty with or resistance to imaginatively entering into attitudes you take to be immoral? How might this relate to the way our imaginings work as contrasted with belief? How might different literary or artistic treatments of the same subject matter make a difference? 3 How do narrative works draw on our moral concepts and responses? Can we suspend our normal moral commitments or application of moral concepts in responding emotionally to art works? Should we respond emotionally to art works as we ought to respond to real world events we witness? Why? Why not? 4 How, if at all, do art works convey moral understanding? How, if at all, is this related to the kinds of moral knowledge art works can teach or reveal to us? When, where and why might this be tied to the artistic value of a work? How can we tell where a work enhances our moral understanding as opposed to misleading or distorting it? 5 What art works do you value overall as art which commend or endorse moral values and attitudes that you do not? Is appreciation of them always marred or lessened by the morally dubious aspect? If not, what explains the differences in evaluation? What, if anything, might you learn by engaging with works which endorse moral attitudes or apply moral concepts different from those you take to be justified? How, if at all, might this connect up with what makes them valuable as art? (shrink)

The focus of this article is on the place of the limited-liability joint stock corporation in a satisfactory account of social justice and, more specifically, the question of how such corporations should be regulated and taxed in order to secure social justice. -/- Most discussion in liberal political philosophy looks at state institutions, on the one hand, and individuals, on the other hand, without giving much attention to intermediate institutions such as corporations. This is in part a consequence of (...) a certain degree of idealization in terms of the background model of society with which such theories operate. Intermediate institutions are in an important sense optional or discretionary, and one would be hampering an account of justice if it built-in from the start particular kinds of institutions which we could imagine doing without. The only non-state institution that has received adequate attention in political philosophy is the nuclear family, in part because of its pervasiveness and resilience. But the corporation is probably second only to the family in its significance, in terms of its effects on the lives of individuals, and yet has been left without adequate attention. (shrink)

Climate change policy decisions are inescapably intertwined with future generations. Even if all carbon dioxide emissions were to be stopped today, most aspects of climate change would persist for hundreds of years, thus inevitably raising questions of intergenerational justice and sustainability. -/- The chapter begins with a short overview of discount rate debate in climate economics, followed by the observation that discounting implicitly makes the assumption that natural capital is always substitutable with man-made capital. The chapter explains why non-substitutability matters (...) if we are to take intergenerational justice seriously and invest aptly in mitigation. Non-substitutability simply implies that there are some forms of capital that cannot be substituted by another, and so consumption of one cannot be compensated with additional stocks of the other. The non-substitutability of critical natural capital can be defended without empirical data about preferences or the need to view the environment as a superior good, and the argument is presented through the language of keeping options open. -/- Those alive today make decisions about what natural capital to use and what to save for future. These choices are often represented as different points in a continuum of sustainability: weak sustainability is associated with a high degree of substitutability and therefore a lot of flexibility over what capital to consume, whereas strong sustainability is more stringent on substitutability. While it may be that in economical understanding weak and strong sustainability collapse into one another, philosophically the emphasis is slightly different. The chapter discusses how normative sustainability can be supported without ignoring opportunity costs and trade-offs. (shrink)