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What Corporate Governance Can Learn from Catholic Social Teaching

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  • Martijn Cremers

    (University of Notre Dame)

Abstract

This reflection focuses on what insights Catholic Social Teaching (CST) can provide for corporate governance. I argue that the ‘standard’ agency theory is overly reductionist and insufficiently incorporates important economic limitations (such as asymmetric information, incomplete contracts, and the need for coordination) as well as human frailty. As a result, such agency theory insufficiently distinguishes firms from markets, which can easily relativize how we treat others and facilitate rationalization of unethical behavior. I then explore how three pillars of CST—human dignity, solidarity, and subsidiarity—can help overcome these limitations. CST proposes a vision of the business corporation as a community of persons, working together in cooperative business relationships toward the shared purpose of contributing to human flourishing.

Suggested Citation

  • Martijn Cremers, 2017. "What Corporate Governance Can Learn from Catholic Social Teaching," Journal of Business Ethics, Springer, vol. 145(4), pages 711-724, November.
    • Handle: RePEc:kap:jbuset:v:145:y:2017:i:4:d:10.1007_s10551-016-3127-5
    DOI: 10.1007/s10551-016-3127-5
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    2. Gregory J. Robson, 2023. "How to Object to the Profit System (and How Not To)," Journal of Business Ethics, Springer, vol. 188(2), pages 205-219, November.
    3. Sandrine Frémeaux, 2020. "A Common Good Perspective on Diversity," Post-Print hal-03232779, HAL.
    4. Luca Mongelli & Pietro Versari & Francesco Rullani & Antonino Vaccaro, 2018. "Made in Carcere: Integral Human Development in Extreme Conditions," Journal of Business Ethics, Springer, vol. 152(4), pages 977-995, November.
    5. Gregorio Guitián & Alejo José G. Sison, 2023. "Offshore Outsourcing from a Catholic Social Teaching Perspective," Journal of Business Ethics, Springer, vol. 185(3), pages 595-609, July.
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    7. Sandrine Frémeaux & Anouk Grevin & Roberta Sferrazzo, 2023. "Developing a Culture of Solidarity Through a Three-Step Virtuous Process: Lessons from Common Good-Oriented Organizations," Journal of Business Ethics, Springer, vol. 188(1), pages 89-105, November.
    8. Faisal Alshehri & Marianna Fotaki & Saleema Kauser, 2021. "The Effects of Spirituality and Religiosity on the Ethical Judgment in Organizations," Journal of Business Ethics, Springer, vol. 174(3), pages 567-593, December.

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