Scholars who favor shareholder primacy usually claim either that managers should not fulfill corporate duties of beneficence or that, if they are required to fulfill them, they do so by going against their obligations to shareholders. Distinguishing between structurally different types of duties of beneficence and recognizing the full force of the normative demands imposed on managers reveal that this view needs to be qualified. Although it is correct to think that managers, when acting on behalf of shareholders, are not required to fulfill wide duties of charity, they are nevertheless required to fulfill a variety of narrow duties of beneficence. What is more, the obligation to fulfill these duties arises precisely because they are acting on behalf of shareholders. As such, this article 1) refines our understanding of the duties of corporate beneficence and 2) helps to identify which duties of beneficence are imposed on managers when they are acting on behalf of shareholders.
ABSTRACT:The distinction between what I call nonelective obligations and discretionary obligations, a distinction that focuses on one particular thread of the distinction between perfect and imperfect duties, helps us to identify the obligations that carry over from principals to agents. Clarity on this issue is necessary to identify the moral obligations within “shareholder primacy” (i.e., “shareholder theory”), which conceives of managers as agents of shareholders. My main claim is that the principal-agent relation requires agents to fulfill nonelective obligations, but it does not always require (and sometimes actually prohibits) discharging discretionary obligations. I show that the requirement to fulfill nonelective obligations is more far-reaching than has been acknowledged by most defenders and critics of shareholder primacy. But I also show that managers are not bound by certain discretionary obligations like charity, showing that their moral obligations are more circumscribed than the obligations that apply to human beings in general.
This paper introduces a body of research on Organizational Behavior and Industrial/Organizational Psychology (OB/IO) that expands the range of empirical evidence relevant to the ongoing charactersituation debate. This body of research, mostly neglected by moral philosophers, provides important insights to move the debate forward. First, the OB/IO scholarship provides empirical evidence to show that social environments like organizations have significant power to shape the character traits of their members. This scholarship also describes some of the mechanisms through which this process of reshaping character takes place. Second, the character-situation debate has narrowly focused on situational influences that affect behavior episodically and haphazardly. The OB/IO research, however, highlights the importance of distinguishing such situational influences from influences that, like organizational influences, shape our character traits because they are continuous and coordinated. Third, the OB/IO literature suggests that most individuals display character traits that, while local to the organization, can be consistent across situations. This puts pressure on the accounts of character proposed by traditional virtue ethics and situationism and provides empirical support to interactionist models based on cognitiveaffective processing system theories of personality (CAPS). Finally, the OB/IO literature raises important challenges to the possibility of achieving virtue, provides valuable and untapped resources to cultivate character, and suggests new avenues of normative and empirical research.
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