Vulnerability and the Basis of Business Ethics: From Fiduciary Duties to Professionalism

Brown, Eric

doi:10.1007/s10551-012-1318-2

Cited by 21 publications

(25 citation statements)

References 15 publications

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“…Such corporate behaviour includes illegal as well as legal but ethically questionable activities. We distinguish this from a notion of vulnerability found in the literature where one party is seen as vulnerable to another party due to power or information advantage (Brown, ). Vulnerability of investors to managerial behaviour, when directors in a corporate business entity fail in their fiduciary duties to protect the interests of shareholders, is an example of vulnerability.…”

Section: The Oev Frameworkmentioning

confidence: 99%

International Evidence on the Determinants of Organizational Ethical Vulnerability

Ullah

Ahmad

Akbar

et al. 2018

British J of Management

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This paper proposes a model to explain what makes organizations ethically vulnerable.Drawing upon legitimacy, institutional, agency and individual moral reasoning theories we consider three sets of explanatory factors and examine their association with organizational ethical vulnerability. The three sets comprise external institutional context, internal corporate governance mechanisms and organizational ethical infrastructure. We combine these three sets of factors and develop an analytical framework for classifying ethical issues and propose a new model of organizational ethical vulnerability. We test our model on a sample of 253 firms that were involved in ethical misconduct and compare them with a matched sample of the same number of firms from 28 different countries. The results suggest that weak regulatory environment and internal corporate governance, combined with profitability warnings or losses in the preceding year, increase organizational ethical vulnerability. We find counterintuitive evidence suggesting that firms' involvement in bribery and corruption prevention training programmes is positively associated with the likelihood of ethical vulnerability. By synthesizing insights about individual and corporate behaviour from multiple theories, this study extends existing analytical literature on business ethics. Our findings have implications for firms' external regulatory settings, corporate governance mechanisms and organizational ethical infrastructure.

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Section: The Oev Frameworkmentioning

confidence: 99%

International Evidence on the Determinants of Organizational Ethical Vulnerability

Ullah

Ahmad

Akbar

et al. 2018

British J of Management

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“…Proponents of the market failures approach think of business ethics as a branch of professional ethics. As Heath puts it: “business ethics is concerned with the special obligations that arise out of the managerial role, and which are imposed upon the manager qua manager.” (Heath, 2006: 534; Brown, 2013: 490–8). The idea is that just as doctors and lawyers have moral obligations that arise out of their role as professionals (and thus are obligations they have qua doctor or lawyer), so managers too have obligations that arise out of their professional role and accrue to them qua manager (rather than qua individual or person) (Brown, 2013: 498–9; Heath, 2006: 534–7).…”

Section: Managers As Professionalsmentioning

confidence: 99%

“…In a series of recent articles, a handful of authors, including most prominently Joseph Heath, have begun to develop a new approach to business ethics (Brown, 2013; Heath, 2004, 2006, 2007, 2011, 2013, 2014; Norman, 2011). While the approach has been defended and developed under at least three different labels, it is most widely known as the market failures approach (Heath, 2004, 2006, 2011, 2014).…”

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confidence: 99%

Professionalism, Agency, and Market Failures

Kriegstein

2016

Bus. Ethics Q.

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According to the market failures approach to business ethics, beyond-compliance duties can be derived by employing the same rationale and arguments that justify state regulation of economic conduct. Very roughly, the idea is that managers have a duty to behave as if they were complying with an ideal regulatory regime ensuring Pareto-optimal market outcomes. Proponents of the approach argue that managers have a professional duty not to undermine the institutional setting that defi nes their role, namely the competitive market. This answer is inadequate, however, for it is the hierarchical fi rm, rather than the competitive market, that defi nes the role of corporate managers and shapes their professional obligations. Thus, if the obligations that the market failures approach generates are to apply to managers, they must do so in an indirect way. I suggest that the obligations the market failures approach generates directly apply to shareholders. Managers, in turn, inherit these obligations as part of their duties as loyal agents.

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“…This is particularly likely when the relevant stakeholder group cannot be easily identified or organized (cf. Brown , p. 489), or when the transaction involves a firm‐specific investment on part of the stakeholder which will pay off, for both parties, only in the long run (cf. Freeman and Evan , pp.…”

Section: Marcoux's Fiduciary Argumentmentioning

confidence: 99%

“…Since the future is uncertain, complete contracts covering the long run are not feasible (for an extended discussion of incomplete contracts between nonshareholding stakeholders and the firm, cf. Brown , pp. 494–7).…”

Section: Marcoux's Fiduciary Argumentmentioning

confidence: 99%

Shareholder Primacy and Deontology

Kriegstein

2015

Business and Society Review

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This article argues that shareholder primacy cannot be defended on the grounds that there is something special about the position of shareholders that grounds a right to preferential treatment on part of management. The notions of property and contract, traditionally thought to ground such a right, are now widely recognized as incapable of playing that role. This leaves shareholder theorists with two options. They can either abandon the project of arguing for their view on broadly deontological grounds and try to advance consequentialist arguments instead or they can search for other morally relevant properties that could ground shareholder rights. The most sustained argument in the latter vein is Marcoux's attempt to show that the vulnerability of shareholders mandates that managers are their fiduciaries. I show that this argument leads to the unacceptable conclusion that it would be unethical for corporations to make incomplete contracts with nonshareholding stakeholders.Hasko von Kriegstein is a Postdoctoral Researcher at

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Vulnerability and the Basis of Business Ethics: From Fiduciary Duties to Professionalism

Cited by 21 publications

References 15 publications

International Evidence on the Determinants of Organizational Ethical Vulnerability

International Evidence on the Determinants of Organizational Ethical Vulnerability

Professionalism, Agency, and Market Failures

Shareholder Primacy and Deontology

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