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GETTING REAL: STAKEHOLDER THEORY, MANAGERIALPRACTICE, AND THE GENERAL IRRELEVANCE OFFIDUCIARY DUTIES OWED TO SHAREHOLDERS
Richard Marens and Andrew Wicks
Abstract Stakeholder theorists have generally misunderstood the
nature and ramifications of the fiduciary responsibilities that
corporate directors owe their stockholders This fiduciary duty
requires the exercise of care, loyalty, and honesty with regard to the
financial interests of stockholders. Such obligations do not conflict
with the normative goals of stakeholder theory, nor, after a century of
case law that includes Dodge Bros, v Ford, do fiduciary responsibilities
owed shareholders prevent managerial policies that are generous or
sensitive to other corporate stakeholders The common law recognizes
a multitude of legal relationships between various corporate
constituents, and fiduciary duties are only a subset of the obligations
that arise from these relationships. This article argues that statute
and case law can bring comparable legal protection to constituents
other than stockholders, and suggests ways that these protections
might be further strengthened. Implications for managementeducation are also discussed
Introduction
Over the last several years, business ethicists (Goodpaster. 1991; Boatright.1994; Freeman. 1994; Goodpaster and Holloran. 1994; Donaldson andPreston, 1995) have disputed the implications for stakeholder theory of thefiduciary obligations owed by corporate management to shareholders. They haveargued extensively as to whether this duty privileges shareholders and whetherpublic policy could or should recalibrate the balance vis-a-vis other groups. Theactual impact of these fiduciar\' responsibilities upon real-world business practice
has received comparatively iittle attention. This paper attempts to address thisneglect through a thorough examination of the relevant case law. In doing so.the authors have arrived at two conclusions. The first is that the existence of afiduciary duty owed to stockholders presents few practical problems for amanagement team that wishes to implement a stakeholder-oriented approach tobusiness. Second, the specific responsibilities generated by this fiduciary dutyare in no way "over and above" the kind of treatment shareholders couldreasonably expect to receive under a stakeholder regime.©1999 Business Ethics Quarterly. V'olume 9, Issue 2 ISSN 1052-150X pp 273-293
274 BUSINESS ETHICS QUARTERLYAlthough stakeholder groups other than shareholders may not be able to enforcea fiduciary duty against corporate management, this legal reality does not
preclude managers from behaving as if they were actually under such obligations.Legal relationships, and particularly legal relationships that emerge undera common law system, are not based on complete, elegant, and consistent sets ofprinciples. They are instead the result of incremental modification of often vagueand overlapping doctrines that must be selectively applied toward solving practical
business problems or settling a variety of disputes. As a result, the preciselegal doctrines that define the relationships between top corporate managementand the various groups holding a stake in the firm's performance will differ fromstakeholder group to stakeholder group precisely because each group holds adifferent economic and social relationship to the firm.This axiom of legal realism generates two important results for sta本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。