Hostname: page-component-cd9895bd7-mkpzs Total loading time: 0 Render date: 2024-12-25T20:14:21.707Z Has data issue: false hasContentIssue false
  • English
  • Français

Reluctant Guardians: The Moral Responsibility of Gatekeepers

Published online by Cambridge University Press:  23 January 2015

John R. Boatright
Get access Rights & Permissions [Opens in a new window]

Abstract:

Intermediaries, such as accountants, lawyers, and bankers, are gatekeepers, which are parties whose cooperation is necessary for corporations to function and who, by withholding cooperation, are able to prevent significant corporate misconduct. The recent scandals at Enron and other corporations were due, in part, to failures by gatekeeper institutions. However, intermediaries exist primarily to provide for-fee services and not specifically to detect and deter misconduct. Insofar as these institutions are gatekeepers or guardians, they serve reluctantly. Hence the question: What is the responsibility of intermediaries to act as gatekeepers? This article argues that the appropriate moral, as well as legal, principle for justifying responsibility in a gatekeeper role is cost effectiveness. This conclusion is reached by means of a hypothetical exercise called the investors’ bargain in which investors—who bear the costs and receive the benefits of intermediaries’ gatekeeper role—are asked to choose the best means of protecting their interests.

Type
Articles
Information
Business Ethics Quarterly , Volume 17 , Issue 4 , October 2007 , pp. 613 - 632
Copyright
Copyright © Business Ethics Quarterly 2007

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aguirre, Gary J. 2003. “The Enron Decision: Closing the Fraud-Free Zone on Errant Gatekeepers?” Delaware Journal of Corporate Law 28: 447–511.Google Scholar
Choi, Stephen. 1998. “Market Lessons for Gatekeepers.” Northwestern University Law Review 92: 916–66.Google Scholar
Coffee, John C. 2001. “The Acquiescent Gatekeeper: Reputational Intermediaries, Auditor Independence and the Governance of Accounting.” Columbia Law School, Working Paper No. 191.Google Scholar
Coffee, John C. 2002. “Understanding Enron: It's about the Gatekeepers, Stupid.” Columbia Law School, Working Paper No. 207.Google Scholar
Coffee, John C. 2004. “Gatekeeper Failure and Reform: The Challenges of Fashioning Relevant Reforms.” Boston University Law Review 84: 301–64.Google Scholar
Coffee, John C. 2006. Gatekeepers: The Professions and Corporate Governance. New York: Oxford University Press.Google Scholar
Creswell, Julie. 2005a. “Citigroup Agrees to Pay $2 Billion in Enron Scandal.” New York Times (June 11): A1.Google Scholar
Creswell, Julie. 2005b. “J. P. Morgan Chase to Pay Enron Investors $2.2 Billion.” New York Times (June 15): C1.Google Scholar
Creswell, Julie. 2007. “Enron Class-Action Lawsuit Blocked.” New York Times (March 20): C1.Google Scholar
Eichenwald, Kurt. 2002a. “A Higher Standard for Corporate Advice.” New York Times (December 23): A1.Google Scholar
Eichenwald, Kurt. 2002b. “Ruling Leaves Players Exposed to Suits on Enron.” New York Times (December 21): C3.Google Scholar
Gilmore, Sally Totten, and William, H. McBride. 1985. “Liability of Financial Institutions for Aiding and Abetting Violations of Securities Laws.” Washington and Lee Law Review 42: 811–51.Google Scholar
Hammdani, Assaf. 2003. “Gatekeeper Liability.” University of Southern California Law Review 77: 53–121.Google Scholar
Hasnas, John. 2006. Trapped: When Acting Ethically Is Against the Law. Washington, D.C.: Cato Institute.Google Scholar
Hays, Kristen. 2007. “Barge Case Could Sail Again.” Houston Chronicle (April 5): Business 1.Google Scholar
Jackson, Thomas H. 1982. “Bankruptcy, Non-Bankruptcy Entitlement, and the Creditors’ Bargain.” Yale Law Review 91: 857–907.Google Scholar
Jorgenson, Anthony J. 1994. “Central Bank of Denver, N.A., v. First Interstate Bank of Denver, N.A.: The Supreme Court Abolished Aiding and Abetting Liability under Section 10(b): The End of an Era, or a Break in the Action.” Oklahoma Law Review 47: 641–78.Google Scholar
Kraakman, Rainier. 1986. “Gatekeepers: The Anatomy of a Third-Party Enforcement Strategy.” Journal of Law, Economics, and Organization 2: 53–104.Google Scholar
Labaton, Stephan. 2006. “Businesses Seek New Protections on Legal Front.” New York Times (October 29): A1 Google Scholar
Lattman, Peter, and John, Emshwiller. 2007. “Enron Class-Action Lawsuit Blocked.” Wall Street Journal (March 20): C3.Google Scholar
Lorsch, Jay W., Leslie, C. Berlowitz, and Andy, Zelleke, eds. 2005. Restoring Trust in American Business: A Report of the Project on Corporate Responsibility (Cambridge, Mass.: MIT Press).Google Scholar
Perryman, Skye Lynn. 2006. “Mail and Wire Fraud.” American Criminal Law Review 43: 715–38.Google Scholar
Springer, Susan E. 1995. “Central Bank v. First Interstate Bank and the Demise of Section 10(b) Private Aiding and Abetting Liability: Opting for a Rule of Economic Efficiency.” George Mason Law Review 4: 213–48.Google Scholar