Managers’ Double Fiduciary Duty: to Stakeholders and to Freedom

In providing an ethical guide for managers, the Clarkson Principles offer one part of a possible professional code, namely, that managers have a fiduciary duty—a duty of loyalty of the corporation’s stakeholders. However, the Clarkson Principles contain little advise for managers when they act politically to fashion the regulatory framework in which stakeholders negotiate. When managers participate in these arenas, I argue that they ought to assume a second fiduciary duty—a duty of loyalty to fair bargaining. Where the first duty of loyalty pertains to the firm’s “constituents,†the second refers to the firm’s “constitution†—to the rules by which the firm’s stakeholders bargain and to the background conditions that distribute advantages. Together, these two fiduciary duties establish the large good—development as freedom—from which a managerial profession can mature.