Justice and Corporate Governance: New Insights from Rawlsian Social Contract and Sen’s Capabilities Approach

Abstract

By considering what we identify as a problem inherent in the 'nature of the firm'-the risk of abuse of authority-we propound the conception of a social contract theory of the firm which is truly Rawlsian in its inspiration. Hence, we link the social contract theory of the firm (justice at firm's level) with the general theory of justice (justice at society's level). Through this path, we enter the debate about whether firms can be part of Rawlsian theory of justice showing that corporate governance principles enter the "basic structure." Finally, we concur with Sen's aim to broaden the realm of social justice beyond what he calls the 'transcendental institutional perfectionism' of Rawls' theory. We maintain the contractarian approach to justice but introduce Sen's capability concept as an element of the constitutional and post-constitutional contract model of institutions with special reference to corporate governance. Accordingly, rights over primary goods and capabilities are (constitutionally) granted by the basic institutions of society, but many capabilities have to be turned into the functionings of many stakeholders through the operation of firms understood as post-constitutional institutional domains. The constitutional contract on the distribution of primary goods and capabilities should then shape the principles of corporate governance so that at post-constitutional level anyone may achieve her/his functionings in the corporate domain by exercising such capabilities. In the absence of such a condition, post-constitutional contracts would distort the process that descends from constitutional rights and capabilities toward social outcomes.

Limits of artificial intelligence in controlling and the ways forward: a call for future accounting research

“…(1) How can social justice perspectives guide our thinking on the implementation of AI and its impact on the workforce? (Fia and Sacconi, 2018) (2) What is the role of "good" corporate governance (Haslam et al, 2019;Stacchezzini et al, 2020) in this and how can it be implemented?…”

“…From this perspective, we identified the following salient questions:How can social justice perspectives guide our thinking on the implementation of AI and its impact on the workforce? (Fia and Sacconi, 2018)What is the role of “good” corporate governance (Haslam et al , 2019; Stacchezzini et al , 2020) in this and how can it be implemented?Can AI ever come to make ethical decisions given that the underlying algorithms (Kellogg et al , 2019; Lindebaum et al , 2020; Martin, 2019) might be biased and non-transparent?To what extent can we take up the existing utopian and dystopian fictional narratives, such as Asimov's three laws of robotics and machine meta-ethics (Anderson, 2007) as guidance for our quest in creating ethical regulations in robotic process automation (Gotthardt et al , 2020)?Will the completely rational thinking of AI bring forward the integrated injustice in a system that is based on short-terminism and shareholder value rather than on humanist value? Then, do we need a discussion of societal values in the age of AI first?…”

“…How can social justice perspectives guide our thinking on the implementation of AI and its impact on the workforce? (Fia and Sacconi, 2018)…”

Specific Investments, Cognitive Resources, and Specialized Nature of Research Production in Academic Institutions: Why Shared Governance Matters for Performance

“…Only a commitment to respect all the legitimate interests and rights of all the noncontrolling stakeholders can counterbalance the risk that the party in authority position may abuse its discretionary power. 7 Governance and accountability measures such as participation and information rights in the decision-making process may guarantee the respect of this commitment (Fia and Sacconi, 2019;Sacconi, 2006Sacconi, , 2011. Shared governance in the university context is a significant, historical, and well-documented example of an institutional mechanism preventing the abuse of authority.…”

Social Contract Theory and Business Legitimacy

“…So there is always more than one single element in the function, and that implies no contradiction. Sacconi, drawing upon neo-institutional cooperative views of the firm (Aoki 1984;Fia and Sacconi 2018), opposes the received wisdom that managerial decision based on multiple objectives is impossible. He simply observes that a joint function (including the goals of each stakeholder weighted in the proportion unanimously agreed upon ex ante) can work as the objective function of the firm perfectly well.…”