Putting Creditors in Their Rightful Place: Corporate Governance and Business Ethics in the Light of Limited Liability [Book Review]
Journal of Business Ethics 102 (S1):21-32 (2011)
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||Bankruptcy Company law Corporate governance Creditors Governance Limited liability Shareholder primacy Stakeholder theory Suppliers Trade creditors|
|Categories||categorize this paper)|
References found in this work BETA
Business Ethics and Values: Individual, Corporate and International Perspectives.C. M. Fisher - 2009 - Prentice Hall/Financial Times.
Citations of this work BETA
Ethical Issues That Arise in Bankruptcy.Jacques Boettcher, Gerald Cavanagh & Min Xu - 2014 - Business and Society Review 119 (4):473-496.
Similar books and articles
Managers' Fiduciary Duties in Financially Distressed Corporations: Chaos in Delaware (and Elsewhere).Rutheford B. Campbell Jr & Christopher W. Frost - manuscript
Exploring Theoretical Paradigms in Corporate Governance.Clive Smallman - 2004 - International Journal of Business Governance and Ethics 1 (1):78-94.
Global Perspectives on the Ethics of Corporate Governance.Deon Rossouw & Alejo G. Sison (eds.) - 2006 - Palgrave-Macmillan.
An Appraisal of Shareholder Proportional Liability.Gordon G. Sollars - 2001 - Journal of Business Ethics 32 (4):329-345.
Corporate Governance in Mexico.Bryan W. Husted & Carlos Serrano - 2002 - Journal of Business Ethics 37 (3):337 - 348.
Employee Governance and the Ownership of the Firm.John R. Boatright - 2004 - Business Ethics Quarterly 14 (1):1-21.
Ethics, Corporations, and Governance.Wesley Cragg & Dirk Matten - 2011 - Journal of Business Ethics 102 (S1):1-4.
Theorising South Africa's Corporate Governance.Andrew West - 2006 - Journal of Business Ethics 68 (4):433 - 448.
New Directions in Corporate Governance and Finance.Robert W. Kolb - 2010 - Business Ethics Quarterly 20 (4):673-694.
The Economic Inefficiency of Secrecy: Pension Fund Investors' Corporate Transparency Concerns. [REVIEW]Tessa Hebb - 2005 - Journal of Business Ethics 63 (4):385 - 405.
The Soft Underbelly of Corporate Governance (Part 1): The Hardware of Board Dynamics.Theo H. Veldsman - 2012 - African Journal of Business Ethics 6 (1):56.
The Soft Underbelly of Corporate Governance (Part 2): The Software of Board Dynamics.Theo H. Veldsman - 2012 - African Journal of Business Ethics 6 (1):65.
Added to index2012-01-07
Total downloads12 ( #373,004 of 2,158,385 )
Recent downloads (6 months)1 ( #355,511 of 2,158,385 )
How can I increase my downloads?