Governance and Incentives: Is It Really All about the Money?

Journal of Business Ethics 159 (3):605-618 (2019)
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Abstract

Governance theories impact how corporations are run, which in turn impacts societal well-being. This dynamic is commonly accepted, as evidenced by the flood of articles exploring the links between corporate governance and corporate social responsibility. This article supplements current corporate governance theories with Catholic social thought to address burgeoning societal issues such as the increasing trust gap, income inequality, and an overemphasis on financial compensation as the primary way to motivate senior managers. The authors propose a shift away from agency theory and stakeholder theory, both of which, with their limited depictions of the motivations of managers, have contributed to excessive executive compensation. Instead, the authors develop an alternative—justice stewardship theory—which integrates organizational justice theory, the principles of stewardship theory, and the insights of 150 years of CST.

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A theory of human motivation.A. H. Maslow - 1943 - Psychological Review 50 (4):370-396.
What Stakeholder Theory is Not.Andrew C. Wicks - 2003 - Business Ethics Quarterly 13 (4):479-502.
Stakeholder Theory and A Principle of Fairness.Robert A. Phillips - 1997 - Business Ethics Quarterly 7 (1):51-66.

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