Putting Creditors in Their Rightful Place: Corporate Governance and Business Ethics in the Light of Limited Liability
Journal of Business Ethics 102 (S1):21-32 (2011)
|Abstract||Contemporary academic and policy discussions of corporate governance tend to accord primacy to the interests of shareholders. While the primacy (descriptive or prescriptive) of shareholders is argued for in various ways, others seek to promote a wider stakeholder model of the firm and its governance. In both cases, the interests of creditors tend to be neglected. In this paper, the fundamental position of creditors in a system of corporate law that offers limited liability is reasserted and explained, and the implications explored. It is demonstrated that there are, in effect, two modes of governance possible for a limited liability corporation: the “normal” mode, when shareholders’ interests are primary, and the “distressed” mode, when creditors’ interests are paramount. As a result of this analysis, writers on corporate governance who are influenced by certain managerial myths or economic theories of the firm are encouraged to view the position of shareholders in a more informed light. Writers on business ethics, who often find themselves contending, perhaps implicitly, with inappropriate understandings of the nature of business corporations and their governance, are similarly alerted to the weakness of certain positions perceived as antithetical to their agenda. Finally, business ethicists who advocate a stakeholder perspective are encouraged to recognize the position of creditors and to pay more attention to them as a stakeholder group|
|Keywords||No keywords specified (fix it)|
|Through your library||Configure|
Similar books and articles
Rutheford B. Campbell Jr & Christopher W. Frost, Managers' Fiduciary Duties in Financially Distressed Corporations: Chaos in Delaware (and Elsewhere).
Clive Smallman (2004). Exploring Theoretical Paradigms in Corporate Governance. International Journal of Business Governance and Ethics 1 (1):78-94.
Deon Rossouw & Alejo G. Sison (eds.) (2006). Global Perspectives on the Ethics of Corporate Governance. Palgrave Macmillan.
Gordon G. Sollars (2001). An Appraisal of Shareholder Proportional Liability. Journal of Business Ethics 32 (4):329 - 345.
Bryan W. Husted & Carlos Serrano (2002). Corporate Governance in Mexico. Journal of Business Ethics 37 (3):337 - 348.
John R. Boatright (2004). Employee Governance and the Ownership of the Firm. Business Ethics Quarterly 14 (1):1-21.
Wesley Cragg & Dirk Matten (2011). Ethics, Corporations, and Governance. Journal of Business Ethics 102 (S1):1-4.
Olufemi Amao & Kenneth Amaeshi (2008). Galvanising Shareholder Activism: A Prerequisite for Effective Corporate Governance and Accountability in Nigeria. Journal of Business Ethics 82 (1):119 - 130.
E. Jansson (2005). The Stakeholder Model: The Influence of the Ownership and Governance Structures. Journal of Business Ethics 56 (1):1 - 13.
Andrew West (2006). Theorising South Africa's Corporate Governance. Journal of Business Ethics 68 (4):433 - 448.
Robert W. Kolb (2010). New Directions in Corporate Governance and Finance. Business Ethics Quarterly 20 (4):673-694.
Tessa Hebb (2006). The Economic Inefficiency of Secrecy: Pension Fund Investors' Corporate Transparency Concerns. Journal of Business Ethics 63 (4):385 - 405.
Theo H. Veldsman (2012). The Soft Underbelly of Corporate Governance (Part 1): The Hardware of Board Dynamics. African Journal of Business Ethics 6 (1):56.
Theo H. Veldsman (2012). The Soft Underbelly of Corporate Governance (Part 2): The Software of Board Dynamics. African Journal of Business Ethics 6 (1):65.
G. J. Rossouw, A. van der Watt & D. P. Malan Rossouw (2002). Corporate Governance in South Africa. Journal of Business Ethics 37 (3):289 - 302.
Added to index2012-01-07
Total downloads2 ( #234,650 of 556,837 )
Recent downloads (6 months)1 ( #64,847 of 556,837 )
How can I increase my downloads?