Business Ethics Quarterly 21 (3):445-471 (2011)
A key factor in the decision to convert a publicly owned company to private status is the expectation that value will be created, providing the firm with rent. These rents have implications regarding the property rights of the firm’s capital-contributing constituencies. We identify and analyze the types of rent associated with the newly private firm. Compared to public firms, going private allows owners the potential to partition part of the residual risk to bond holders and employees, rendering them to be co-residual risk bearers with owners. We propose that new promotion-based contracts with bond holders and employees, reflecting their particular investments, be negotiated as the firm migrates from public to private status. These contracts should acknowledge the firm’s intent to maximize shareholder value and its need to take the risks necessary to do so, but support that the firm’s survival not be undermined due to its possibly opportunistic owners
|Keywords||Applied Philosophy Business and Professional Ethics Social Science|
|Categories||categorize this paper)|
References found in this work BETA
No references found.
Citations of this work BETA
The Great Escape: The Unaddressed Ethical Issue of Investor Responsibility for Corporate Malfeasance.Curtis L. Wesley Ii & Hermann Achidi Ndofor - 2013 - Business Ethics Quarterly 23 (3):443-475.
Similar books and articles
Does A Company's “Going Private” Tend to Harm Its Stakeholders? A Contingency-Based Approach to Stakeholder Effects.Marguerite Schneider & Alix Valenti - 2009 - Proceedings of the International Association for Business and Society 20:337-347.
The Effects of “Going Private” on Corporate Financial and Corporate Social Performance.Marguerite Schneider & Alix Valenti - 2008 - Proceedings of the International Association for Business and Society 19:236-245.
Discovering the Role of the Firm: The Separation Criterion and Corporate Law.Daniel F. Spulber - unknown
Corporate Philanthropic Disaster Response and Ownership Type: Evidence From Chinese Firms' Response to the Sichuan Earthquake. [REVIEW]Ran Zhang, Zabihollah Rezaee & Jigao Zhu - 2009 - Journal of Business Ethics 91 (1):51 - 63.
Self-Ownership.Peter Vallentyne - 2001 - In Laurence Becker & Charlotte Becker (eds.), Encyclopedia of Ethics, 2nd edition. Garland Publishing.
Mergers, Takeovers, and a Property Ethic.Vincent Norcia - 1988 - Journal of Business Ethics 7 (1-2):109 - 116.
Building Community Into Property.Edmund F. Byrne - 1988 - Journal of Business Ethics 7 (3):171 - 183.
Private Equity and the Public Good.Kevin Morrell & Ian Clark - 2010 - Journal of Business Ethics 96 (2):249 - 263.
Policy Approaches to Induce Corporate Social Responsibility in Public and Private-Sector Firms in Developing Countries.Runa Sarkar - 2007 - International Corporate Responsibility Series 3:231-252.
Preserving Common Rights Within Private Property.Murray Hofmans-Sheard - 2005 - Philosophy in the Contemporary World 12 (2):3-9.
Models of the Relationship of the Firm to Society.Thomas F. McMahon - 1986 - Journal of Business Ethics 5 (3):181 - 191.
Property Rights and the Right to the Fruits of One's Labor: A Note on Adam Smith's Jurisprudence.Amos Witztum - 2005 - Economics and Philosophy 21 (2):279-289.
Added to index2011-12-01
Total downloads14 ( #327,134 of 2,154,085 )
Recent downloads (6 months)1 ( #398,005 of 2,154,085 )
How can I increase my downloads?