The “basic debate” in business ethics between shareholder theory and stakeholder theory has underlined the field since its inception, with wide ranging normative, descriptive, and instrumental arguments offered on both sides. We maintain that insofar as this is primarily a normative debate, clarity can be brought by elucidating how it is framed by the political philosophies of liberalism and libertarianism.With liberalism represented by John Rawls’s theory of justice and libertarianism represented by the ideas of Milton Friedman and Robert Nozick, and (separately) Edward Freeman, the paper shows that both liberalism and libertarianism can be interpreted to justify shareholder and stakeholder theory respectively. The debate between shareholder theory and stakeholder theory is framed by liberal and libertarian justifications that hinge primarily on whether and to what extent one should have exogenous or endogenous safeguards on corporate behavior. Accordingly, political philosophy turns out to be highly relevant to both business ethics and corporate governance, not because the corporation resembles the state, but because of the potential safeguards placed on the corporation by the state.

This study examines whether reputable analysts and brokerage houses as thinker-driven middlemen led corporations (doers) to engage in CSR by investigating the causal relation between CSR and analysts and brokerage houses’ reputations. While theory of information asymmetry predicts that corporations with higher level of CSR tend to attract more reputable analysts and brokerage houses such that they can disseminate valuable information to outside investors, the social pressure theory expects corporations, which receive coverage from more reputable analysts and brokerage houses, tend to have higher CSR. Our findings suggest that CSR activities per se do not attract experienced analysts and reputable brokerage houses. Instead, we find that corporations which are covered by more experienced analysts and reputable brokerage houses tend to increase their CSR activities, indirectly supporting the social pressure hypothesis based on thinker-led-doer model. In addition, we find that corporations tend to have higher CSR strengths, lower CSR concerns, and increased CSR components of diversity and product when they are covered by more reputable analysts and brokerage houses. We interpret these findings are supportive of the social pressure hypothesis, rather than the information asymmetry hypothesis.

Trust in leadership is at all all-time low and the impact on organizational behavior and performance cannot be ignored or denied. As leaders, there is a way for you to reverse this trend. You can decide to establish and sustain trust in the workplace—by getting naked—not in the physical sense, but from the perspective of being authentic and transparent. Earning the trust and loyalty of those you are privileged to lead lays the groundwork for a high performing, motivated, and, engaged culture . . . a definitive competitive advantage. Needless to say, culture is always a reflection of our leadership values and behavior. Through our words, decisions, and behavior, the culture is “sculpted.” In every case, culture is created either by intentional design or by default. If you aspire to make a profound, positive, and sustaining impact on your organization, the hearts and minds of those you lead must be earned. In a world and time where corruption, deceit, and ethical lapses are commonplace, we’ve never had a greater need for trusted, ethical leaders. If you choose to be a trusted leader, you have the opportunity to differentiate yourself and your organization and enjoy a sustainable competitive advantage while making the world a better place.

This paper is a commentary on C. Richard Panico’s article “Naked Leadership: Lead to Win Hearts and Minds.” The relationship between academic and practitioner literature on leadership is symbiotic. Both approaches have their limitations. Academic theories may be impractical and practitioner’s ideas are sometimes anecdotal and highly contextual. Yet, as the paper demonstrates, the two literatures can overlap in interesting ways.

Businesses always exist in some context. This essay proposes three criteria of contextual integrity—the principles of inclusion, relational identity, and completeness— with examples of their violation and proposals for their repair. Adam Smith’s The Wealth of Nations violates the principle of inclusion by dissociating his advocacy of free trade from the slave trade on which it depended. We can repair this violation by developing a civic perspective that allows us to recognize the close connection between early capitalism and slavery. In The Wealth of Nations, Smith also violated the second principle of contextual integrity by identifying property relations as a process of natural evolution. In fact, property relations are grounded in civil law. We can repair this violation by recognizing that civic relations should be the basis for property relations. The violation of the contextual integrity of completeness can be observed in the division of the economy into different sectors that separate Wall Street from Main Street. We can repair this violation by designing the economy as different systems of provision, such as the housing or food system. This would allow us to have a complete picture of the contexts in which businesses exist, and help us to understand how business ethics might promote contextual integrity.

This paper, conceptually mainly informed by Michel Foucault’s notion of morality, ethics, and ethical practice, illustrates the power program and the moral codes which currently govern the professional field of the arts. Building on empirical material from the field of theatre, the paper discusses how the moral codes and subject ideals that are promoted through the ‘culturepreneurial’ program affect and shape the subjectivity of artists and their specific modes of organizing ethical relations to self and others (Foucault 1984, 1986). The insights of the study emphasize that subjectification presents a dynamic and precarious process. Discursively promoted moral codes are used by the artists in a variety of ways; they are accepted, undermined, and re-created. While doing so, artistic professionals contribute to both their own subjection and in-subordination.

No global professional codes for the natural science and technology professions exist. In light of how the application of new technology can affect individuals and communities, this discrepancy warrants greater scrutiny. This article analyzes the most relevant processes and seeks to explain why these processes have not resulted in global codes. Moreover, based on a human rights approach, the article gives recommendations on the future process and content of codes for science and technology professions. The relevance of human rights in the realm of individual conduct is based on the fact that while human rights treaties primarily outline State obligations, individuals have responsibility for human rights promotion. Human rights principles have only recently been subject to interests from policy makers and academics, and must be better clarified. Human rights principles are found to be relevant, but are effective only if they are applied in conjunction with substantive human rights.

It is uncontroversial that corporations are legal agents that may be attributed with legal responsibilities. However, can corporations also be moral agents that are the proper subjects of moral responsibility attributions? The concept of corporate moral agency entails that corporations can be the proper bearers of moral responsibilities in a manner that is distinct from their human members. The paper acknowledges the important work done by Velasquez in debunking the purported intention and action abilities for corporate moral agency, but suggests that a simpler debunking is possible by focusing on the moral agency ability of autonomy. Furthermore, a proper grasp of the autonomy ability provides a greater understanding for why corporations cannot have autonomous intentions nor perform autonomous actions. The autonomy ability demonstrates the fallacy of corporate moral agency because it shows the impossibility of establishing the corporation as the proper bearer of moral responsibility in a manner that is distinct from the corporate members.

This paper presents an epistemological or knowledge-theoretic reinterpretation of the role of external accountants. It presents a joint epistemic agent model in which corporate management and accountants together form a source of testimonial knowledge for the firm’s stakeholders about the firm’s financial situation. Recent work from virtue epistemology is used, according to which knowledge is, roughly, true belief that is justified by way of the exercise of epistemic virtue. In the joint epistemic agent model, corporate management provides information, while the accountants ensure justification. The paper argues that to ensure justification, accountants have to exercise self-regarding epistemic virtues such as open-mindedness, but also other-regarding epistemic virtues such as generosity. It is also argued that these virtues are only partly encompassed in existing professional codes of conduct.

This review of Corporate Responsibility: The American Experience expands and clarifies the book’s concept of corporate responsibility by emphasizing the centrality of social, moral, and stakeholder dimensions, with special attention given to the emergence of these key ideas in mid-twentieth-century America. These developments are seen as supplements to an otherwise comprehensive discussion of corporate responsibility found in this volume.

There is growing appreciation of the challenges posed by our current economic activity in terms of the natural environment. Increasingly, people have come to appreciate that business must not only be more aware of its environmental impact, but also must be more environmentally sustainable in its core operations. Academic theories of management influence managerial practice. They clarify what is important to the corporation, and where managers and employees should direct their attention. The focus of this paper is to explore the extent to which three possible managerial mindsets—shareholder value maximization, stakeholder value maximization, and the triple bottom line—may either enhance or inhibit the ability of corporations to manage in an environmentally sustainable way. We discuss the implications of each of these mindsets and highlight their relative strengths and weaknesses, noting that all three hold promise, but each has limitations in enabling managers to operate sustainably.

This study aims to enhance the understanding about the influence of perceived ethical work climate dimensions on employees’ trust in co-workers. The instrument used was Victor and Cullen’s (1988) questionnaire containing five empirically derived types of ethical climate (caring, law and code, rules, instrumentalism, and independence). As hypothesized, the study revealed that the instrumental ethical climate dimension was negatively related, and independent climate was positively related to co-worker trust. Thus, two ethical climate dimensions (independent and instrumental) account for the 22.7 percent variation taking place in co-worker trust while the remaining climate types had no significant impact. The findings may be of help particularly to human resource staff in developing policies to better off relations among employees acknowledging differing potential of ethical climate types.

Contributions to stakeholder theory often do not systematically deal with the prioritization of stakeholder interests. An exception to this is Reed’s Habermasianapproach to stakeholder management. Central to Reed’s discursive approach is Habermas’s distinction between morality and ethics. Many authors in business ethics argue that, because of its distinction between morality and ethics, discourse ethics is well suited for dealing with the pluralism that characterizes modern society, but also mention complications with the application of this distinction. This paper taps into the vivid debate in political philosophy on Habermas’s distinction between morality and ethics and, on this basis, further elaborates how stakeholder interests should be prioritized from the point of view of discourse ethics. It thus estimates the consequences of the objections against Habermas’s distinction for a discursive approach to the prioritization of stakeholder interests. The conclusion is that, although Habermas’s distinction is not as neat as it may seem, it is not fundamentally challenged and may be successfully applied in the prioritization of stakeholder interests.

In this paper I argue that the real and only victims of insider trading are those being wrongfully prosecuted under the current broad interpretation of Rule 10(b)-5 of the Securities Exchange Act. The term ‘insider trading’ has no clear legal definition and thus lends itself to prosecutorial overreach. I argue that such overreach characterizes the numerous insider trading investigations and prosecutions currently being pursued by the Securities and Exchange Commission (SEC). Rather than any valid application of securities law, these prosecutions reflect political opportunism and the influence of powerful special interests within the securities industry. I conclude by advocating that Rule 10(b)-5 be applied as originally intended, namely to deter active securities fraud and price manipulation only.

A viatical settlement (or viatical) is a transaction in which an investor purchases the life insurance policy from a terminally ill person for a lump sum so that the investor can receive those benefits at the time of death. While there is an ongoing debate in the insurance and financial planning industry about viaticals, including the ethics of this practice, the focus has been predominantly on abuses in the course of buying and selling viaticals and less on the fundamental ethicality of the economic idea behind viaticals. This paper offers a systematic ethical analysis of viaticals that leverages the distinction between the ethicality of an economic idea and the ethicality of economic reality to isolate and discuss the fundamental ethical problems of viaticals. By unpacking the evaluative content of our negative emotional reactions to viaticals, we show that, even under ideal circumstances, the economic idea of viaticals is, at its core, unethical.

Higher education institutions worldwide have begun to embrace sustainability issues and engage their campuses and communities in such efforts, which have led to the development of integrity and ethical values in these organizations and their relationships with stakeholders. This study provides a literary review of the concept of University Social Responsibility (USR) and sustainability programs worldwide, grouped into eight research streams: conceptual framework, strategic planning and USR, educating on USR, spreading USR, reporting and USR, evaluation of USR, barriers and accelerators and case studies. The aforementioned research streams served as a context to explore best practices in sustainability on a global basis.