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Weeding Out Flawed Versions of Shareholder Primacy: A Reflection on the Moral Obligations That Carry Over from Principals to Agents

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  • Mejia, Santiago

Abstract

The distinction between what I call nonelective obligations and discretionary obligations, a distinction that focuses on one particular thread of the distinction between perfect and imperfect duties, helps us to identify the obligations that carry over from principals to agents. Clarity on this issue is necessary to identify the moral obligations within “shareholder primacy†(i.e., “shareholder theory†), which conceives of managers as agents of shareholders. My main claim is that the principal-agent relation requires agents to fulfill nonelective obligations, but it does not always require (and sometimes actually prohibits) discharging discretionary obligations. I show that the requirement to fulfill nonelective obligations is more far-reaching than has been acknowledged by most defenders and critics of shareholder primacy. But I also show that managers are not bound by certain discretionary obligations like charity, showing that their moral obligations are more circumscribed than the obligations that apply to human beings in general.

Suggested Citation

  • Mejia, Santiago, 2019. "Weeding Out Flawed Versions of Shareholder Primacy: A Reflection on the Moral Obligations That Carry Over from Principals to Agents," Business Ethics Quarterly, Cambridge University Press, vol. 29(4), pages 519-544, October.
    • Handle: RePEc:cup:buetqu:v:29:y:2019:i:04:p:519-544_00
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    Cited by:

    1. Santiago Mejia, 2019. "The Moral Imperatives of Humanistic Management," Humanistic Management Journal, Springer, vol. 4(2), pages 155-158, December.
    2. Grant J. Rozeboom, 2023. "How to Evaluate Managerial Nudges," Journal of Business Ethics, Springer, vol. 182(4), pages 1073-1086, February.
    3. Santiago Mejia, 2022. "Socratic Ignorance and Business Ethics," Journal of Business Ethics, Springer, vol. 175(3), pages 537-553, January.
    4. Thomas Donaldson, 2023. "Value creation and CSR," Journal of Business Economics, Springer, vol. 93(6), pages 1255-1275, August.
    5. John F. Gaski, 2022. "Toward social responsibility, not the social responsibility semblance: marketing does not need a conscience," AMS Review, Springer;Academy of Marketing Science, vol. 12(1), pages 7-24, June.
    6. J. Joseph Cronin, 2022. "Marketing’s new myopia: Expanding the social responsibilities of marketing managers," AMS Review, Springer;Academy of Marketing Science, vol. 12(1), pages 30-37, June.

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