Shareholder Theory and Kant's 'Duty of Beneficence'

Journal of Business Ethics 117 (3):583-599 (2013)
Abstract
This article draws on the moral philosophy of Immanuel Kant to explore whether a corporate ‘duty of beneficence’ to non-shareholders is consistent with the orthodox ‘shareholder theory’ of the firm. It examines the ethical framework of Milton Friedman’s argument and asks whether it necessarily rules out the well-being of non-shareholders as a corporate objective. The article examines Kant’s distinction between ‘duties of right’ and ‘duties of virtue’ (the latter including the duty of beneficence) and investigates their consistency with the shareholder theory. The article concludes that it is possible within the ethical framework of shareholder theory for managers to pursue directly the happiness of non-shareholders. Furthermore, shareholders have a duty to hold management to account for the moral consequences of the firm’s activities on non-shareholding stakeholders
Keywords Deontology  Duty of beneficence  Friedman  Kant  Imperfect duties  Property rights  Shareholder theory  Stakeholder theory  Shareholder activism
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References found in this work BETA
R. Edward Freeman (1994). The Politics of Stakeholder Theory. Business Ethics Quarterly 4 (4):409-421.

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