The primacy of shareholder demands in the traditional theory of the firm has typically excluded marginalised stakeholder voices. However, shareholders involved in social shareholder engagement (SSE) purport to bring these voices into corporate decision-making. In response to ethical concerns about the legitimacy of SSE, we use the lens of discourse ethics to provide a normative analysis at both action and constitutional levels. By specifying three normative questions, we extend the analysis of SSE to identify a political role for shareholders in pursuit of the common good. We demonstrate the desirability for SSE to promote regulatory/institutional change to guarantee marginalised stakeholders a voice in corporate decisions that affect them. The theory of SSE we propose thus calls into question the stark separation of the political and economic spheres and reveals an underlying tension, often overlooked, within the responsible investment literature.

The language of virtue is gaining wider appreciation in the philosophical, psychological, and management literatures. Ethicists and social scientists aim to integrate normative and empirical approaches into a new “science of virtue.” But, I submit, they are talking past each other; they hold radically different notions of what a virtue is. In this paper, I shall examine two conflicting conceptions of virtue, what I call the reductive and the non-reductive accounts of virtue. I shall critically study them and argue that the non-reductive view is the best philosophical account of virtue and the only one that can account for the way we talk about virtue in business and in everyday life. We can only understand what it means to act virtuously through the examination of the attitudes, beliefs, desires, and inclinations of the virtuous agent. I shall illustrate the differences between the reductive and non-reductive accounts by considering the virtue of gratitude.

This article examines the “Choice Argument” for sweatshops, i.e., the claim that it is morally wrong or impermissible for third parties to interfere with the choice of sweatshop workers to work in sweatshops. The Choice Argument seeks, in other words, to shift the burden of proof onto those who wish to regulate sweatshop labor. It does so by forcing critics of sweatshops to specify the conditions under which it is morally permissible to interfere with sweatshop workers’ choice. My aim in this article is to meet that burden. Unlike other critics of sweatshop labor, however, my argument does not proceed from contested economic or moral assumptions. To the contrary, my strategy will be to demonstrate that even if we grant the truth of the economic and moral assumptions made by defenders of the Choice Argument, it nevertheless does not follow that it is morally wrong to interfere with the choice of sweatshop workers to work in sweatshops. The Choice Argument thus fails on its own terms.

This paper argues that, although stakeholder engagement occurs within the context of power, neither market-centered CSR nor the deliberative model of political CSR adequately addresses the specter of power asymmetries and the inevitability of conflict in stakeholder relations, particularly for powerless stakeholders. Noting that the objective of stakeholder engagement should not be benevolence toward stakeholders, but mechanisms that address power asymmetries such that stakeholders are able to protect their own interests, I present a framework of stakeholder engagement based on agonistic pluralism that seeks to structure and utilize discord rather than reduce or eliminate it. I then propose arbitration as an agonistic mechanism to address power asymmetries in stakeholder engagement and explore its implications.

Like most egalitarian political philosophers, John Rawls believes that a just society will rely on markets and business firms for much of its economic activity—despite acknowledging that market systems will tend to create very unequal distributions of goods, opportunities, power, and status. Rawls himself remains one of the few contemporary political philosophers to explore at any length the way an egalitarian theory of justice might deal with fundamental options in political economy. This article examines his arguments and conclusions on these topics. It argues that contemporary Rawlsians will reach different conclusions if they take more seriously than Rawls himself did: (1) the implications, for the political culture and the democratic regulatory state, of large firms competing in adversarial markets characterized by the inevitable “fact of market failure,” and (2) the relevance of ownership and governance relationships involving different kinds of business firms. And with respect to the second point, Rawlsians and other egalitarians have much to learn from contemporary economic, legal, and sociological theories of the firm, and the role of these theories in the structure of and rationale for corporate law. This is the kind of social theory that Rawls believes is relevant to the justification and application of theories of justice, but he himself did not appeal to it in his writings on political economy. Contemporary egalitarians can and should appeal to it now, and in doing so correct errors and omissions in Rawls’s analysis. But taking seriously the two points mentioned above will also force egalitarians who support efficient markets to face difficult dilemmas or compromises of their own.

Since the dawn of capitalism, corporations have been regarded by the law as separate legal “persons.” Corporate “personhood” has nonetheless remained controversial, and our understanding of corporate personhood often influences our thinking about the social responsibilities of corporations. This essay, written in honor of Prof. Thomas Donaldson, explores the tension in recent decisions by the U.S. Supreme Court and the Delaware Chancery Court about what corporations are, whose interests they serve, and who gets to make decisions about what they do. These decisions suggest that the law does not unequivocally support Donaldson’s vision of corporations as “moral” persons.

Although it is unremarkable to hear a corporate culture described as ethical or unethical, it remains quite unclear what such a claim means or how it may be justified. I begin by addressing these two questions by offering an account of corporate culture as the intrinsic values that are shared by organisation members and that underpin organisational goals. I then employ this analysis to offer a new account of how moral responsibility is generated and distributed in business organisations. Since certain corporate values, or culture, will predictably promote wrongdoing by members, all those who participated in that culture will acquire a degree of moral responsibility for the wrongdoing that results. They are, we may say, complicit in the wrongdoing because they helped facilitate it. This is because, by sharing values in the way that creates corporate culture, organisation members give each other reasons for acting in line with those values.

The purpose of the present research was to investigate if and when leaders’ trait-like tendency to experience contempt would result in a lack of constructive attitudes and behaviors towards subordinates and an increase in destructive attitudes and behaviors towards subordinates. Previous research shows that increased power aligns individuals’ behavior with their trait-like tendencies. Accordingly, we hypothesized that leader contempt and power will interact to predict leaders’ people orientation, ethical leadership, dehumanization, and self-serving behavior. Across three studies, we indeed found that contempt was more negatively associated with leaders’ people orientation and ethical leadership, and more positively associated with dehumanization and leaders’ self-serving behavior, when the leader had higher levels of power rather than lower levels of power. These results are discussed in the context of corporate ethical scandals demonstrating leaders’ focus on personal gain to the detriment of the needs of their subordinates.

In this article we investigate a philosophical problem for normative business ethics theory suggested by a phenomenon that contemporary psychologists call “bounded ethicality,” which can be identified with the putative fact that well-intentioned people, constrained by psychological limitations, make ethical choices inconsistent with their own ethical beliefs and commitments. When one combines the idea that bounded ethicality is pervasive with the idea that a person morally ought to do something only if she can, it raises a doubt about the practical relevance of the moral principles that business ethics theory prescribes. We call this doubt the Radical Behavioral Challenge. It consists in the idea that people cannot generally conform to the normative ethical principles that business ethics theorists prescribe, and that these principles are therefore practically irrelevant. We answer the Radical Behavioral Challenge and explore normative implications of our answer.

Of the many developments in business ethics that Thomas Donaldson has helped pioneer, one is the application of social contract theory to address questions about the responsibilities of business actors. In Corporations and Morality, Donaldson develops one of the most sustained and comprehensive accounts that aims to justify the existence of for-profit corporations and to specify and ground their responsibilities. In order to further our understanding about the purpose and responsibilities of productive organizations, and as a contribution to the scholarship on Donaldson’s thought, this paper gathers together the critical responses to Donaldson’s account along with Donaldson’s replies to his critics. The paper argues that we would do well to continue engaging with Donaldson’s account because of its distinctive and challenging conception of the purpose and responsibilities of productive organizations, but that many of the insights to be gained come from reframing the role played by social contract theory.

The major aim of this article is to show that John Rawls’s theory of justice cannot be applied effectively to questions of business ethics and corporate governance. I begin with a reading of Rawls that emphasizes both the critical and pragmatic nature of his theory. In the second section I look more closely at the notion of society’s “basic structure” and its place within Rawls’s theory. In the third section, I argue that “the corporation” cannot be understood as part of this basic structure and is not, therefore, a subject of justice for Rawls or his interpreters. Finally, I show that Rawls’s inability to speak to the corporation is a weakness, regardless of one’s particular view on the corporation. I conclude by considering what Rawls’s theory helps us to understand about the problems involved in integrating corporate governance, business ethics, and political philosophy.

This paper takes up recent challenges to consequentialist forms of ethically evaluating risks and explores how a non-consequentialist form of deliberation, Kantian ethics, can address questions about risk. I examine two cases concerning ethically questionable financial risks: investing in abstruse financial instruments and investing while relying on a bailout. After challenging consequentialist evaluations of these cases, I use Kant’s distinction between morality and prudence to evaluate when the investments are immoral and when they are merely imprudent. I argue that the investment practices are imprudent when they do not take adequate precautions to secure the firm’s long-term flourishing. They are immoral in a Kantian sense when they risk the destruction of the financial system upon which the firms depend. The upshot of my analysis is that moral actions require more risk aversion than prudent actions and prudent actions require more risk aversion than expected-value-maximizing actions.

What kinds of markets, market regulations, and business organizations are compatible with contemporary egalitarian theories of justice? This article argues that any thoughtful answer to this question will have to draw on recent developments in political philosophy that are concerned not only with the equality of the distribution of core goods (or as John Rawls famously put it, with the “distribution of the benefits and burdens of social cooperation”) but also with the requirements for equality of status, voice, and so on, in the relations between individuals and within organizations. The dominance of theories of distributive justice in egalitarian political philosophy since Rawls may have contributed, on the one hand, to the oft-recognized gulf between these theories and their theorists and, on the other, to discussions of corporate governance and business ethics. The main purpose of this article is to introduce business ethicists to some of the less-familiar features of recent relational theories of justice and equality, and to suggest that some of these notions may help bridge the gap between business ethics and political philosophy more generally.

In this paper we examine how ethical values contribute to national economic prosperity. We extend the concept of an ethical wealth of nations first introduced by Donaldson in which he proposed four categories of ethical values—fairer distribution of goods, better government, ingrained social cooperation, and inculcation of economic duties—that can drive economic performance, but only if citizens ascribe “intrinsic value” to them independent of their economic interests. Our analysis draws on institutional economics and sociology research to show that if ethical values are to drive economic performance, they must also be supported by the institutional fabric of the nation. We embed an expanded set of ethical values in a set of democratic, free market and civil society institutions spanning three sectors of society—political, economic and cultural respectively. We conclude by discussing the implications of our institutional framework for moral education.

It is frequently asserted that religion enhances the ethical climate of business. This is buttressed by the tacit assumption that religious moral authority is easily combined with and exerted in business, an inter-institutional process I call Engagement. By drawing upon Secularization Theory’s societal-level focus on religious authority and the symbolic boundary work surrounding the interface of competing institutional logics, I theorize a broader range of inter-institutional processes including, Disengagement, Co-optation and Adjudication. To exemplify these inter-institutional processes, I engage in qualitative analysis of historic religious magazines from 1927-1931 and 1985-1989 and focus on the religious moral authority directed at the financial market. I discuss how my findings relate to the scholarship on Religion and Business in particular and Business Ethics more broadly.