In his 2014 paper entitled “Reason, Rationality and Fiduciary Duty”, Lydenberg ventures into the field of the moral and political philosophy dealing with distributive justice in search of fresh perspectives on fiduciary duty. Simply by doing this, Lydenberg makes the very important contribution of drawing a little more attention to the potential that this huge field of study might have in relation to understanding socially responsible investment. There are however difficulties with Lydenberg’s paper. I describe three in particular that I (...) believe warrant critical attention. The first emerges out of Lydenberg’s treatment of the central concepts of reasonableness and rationality. The second lies in his apparent suggestion that at some earlier time fiduciary duty was somehow more generally other-considering than it is today. And finally, the third is associated with the place that impartiality occupies in Lydenberg’s storyline, and the implications of this in terms of his call for a reconciliation between reasonableness and rationality. This critical scrutiny clarifies theoretical and practical implications of the transition Lydenberg is suggesting. In doing this, it makes the realization that what Lydenberg is attempting is more than likely nothing short of resolving “The fundamental problem of ethics and politics” in the specific context of fiduciary action. (shrink)

Corporate citizenship is a prominent international issue as contemporary corporations are no longer expected to perform financially, but are also expected to have an ethical relationship of responsibility between the corporate itself and the society in which it operates and performs it business activities. Provides an up-to-date theoretical content pertaining to corporate citizenship, providing local and global examples and case studies.

This paper focuses on the issue of justice as a challenge facing business and society. I advance a simple deductive argument based on two premises. The first emerges out of theories of justice and holds that fairness, as a foundational basis for justice, demands impartiality or the avoidance of bias. The second emerges out of fiduciary law and holds that the duty of loyalty owed by managers to serve the interests of investors is fundamentally partial or biased. The conclusion is (...) the troubling fact that the fiduciary duty of loyalty owed by managers to serve the interests of investors appears to be incompatible with the demands of justice. Having presented this, I describe the impartiality tools of Rawls’ veil of ignorance and Adam Smith’s impartial spectator and discuss how these might be applied in this context. I speculate that while Smith’s impartial spectator is absolutely incommensurable with managers’ fiduciary duty of loyalty, Rawls’ veil of ignorance might be used to imagine a synthesis between this duty of loyalty and the impartiality demands of justice – in theory at least. And finally, as a parting shot, I wonder whether the real “Leadership Challenge that Matters” isn’t the gap between theory and reality. (shrink)

There appears to be a growing disquiet amongst academics surrounding the ascendancy of 'responsible' investment that is egoist or self-interested in character — 'business case' responsible investment. This ascendancy has in no small measure been associated with the uptake of United Nations Principles for Responsible Investment (PRI) as a de facto standard for mainstream responsible investment. This article contributes to this disquiet. It does this by examining how egoist 'responsible' investors (as endorsed by the PRI) might have behaved had they (...) been around in the 1970s, 1980s and early 1990s during days of the anti-apartheid socially responsible investment (SRI) movement. Armed with near perfect (hindsight grade) enhanced analytics, it is clear that the signals that such egoist ' responsible' investors would have sent to company management in terms of the apartheid issue would have been highly muddled and therefore ineffective. The net conclusion is that there is nothing inherently or inevitably ' responsible' about egoist investment and that the aversion to behaving ethically amongst institutional investors must be challenged and not swept under a carpet of rhetoric. (shrink)