TITLE

Ethical Management of Crises: Shareholder Value Maximisation or Stakeholder Loss Minimisation?

AUTHOR(S)

Alpaslan, Can M.

PUB. DATE

December 2009

SOURCE

Journal of Corporate Citizenship;Winter2009, Issue 36, p41

SOURCE TYPE

Academic Journal

DOC. TYPE

Article

ABSTRACT

I argue that, in the context of crises, the shareholder value maximisation model, the dominant form of corporate governance, may lead to decisions and behaviours that are in conflict with several prima facie duties such as reparation, beneficence and non-maleficence. Drawing on a typology of crisis response and a typology of crises, I contrast the shareholder value maximisation model, which treats the ethical customs of a society as a constraint, with the stakeholder model of corporate governance, which treats ethical customs as an objective. I suggest that, in the context of crises, the stakeholder model may be the ethically more appropriate choice of corporate governance.

ACCESSION #

48722167

Tags: CORPORATE governance;  BUSINESS ethics;  THEORY of the firm;  STOCKHOLDER wealth;  SOCIAL responsibility of business;  STAKEHOLDER theory

 

Related Articles

• Stakeholder Theory and "The Corporate Objective Revisited ": A Reply. Sundaram, Anant K.; Inkpen, Andrew C. // Organization Science;May/Jun2004, Vol. 15 Issue 3, p370 

  Freeman et al. (2004) offer a spirited rebuttal to our paper "The Corporate Objective Revisited" from the perspective of stakeholder theory. However, they fall short in making a case against the logic of shareholder value maximization. The authors confound issues of "value" and "values," ignore...

• Institutional Impediments To Voluntary Ethics Measurement Systems: An International Perspective. Stovall, O. Scott; Neill, John D.; Reid, Brad // Journal of Applied Business Research;Mar/Apr2009, Vol. 25 Issue 2, p119 

  Despite numerous appeals in the business ethics literature for a multiple-stakeholder perspective to corporate governance, in practice the widespread adoption of voluntary ethics measurement systems that consider multiple stakeholders remains elusive. In this paper, we employ an institutional...

• Learning from Multi-Stakeholder Networks: Issue-Focussed Stakeholder Management. Roloff, Julia // Journal of Business Ethics;Sep2008, Vol. 82 Issue 1, p233 

  From an analysis of the role of companies in multi-stakeholder networks and a critical review of stakeholder theory, it is argued that companies practise two different types of stakeholder management: they focus on their organization�s welfare (organization- focussed stakeholder management) or...

• Organising for Corporate Social Performance: Effects of Corporate Citizenship on Employees. Roy, Marie-Jos�e // Journal of Corporate Citizenship;Winter2009, Issue 36, p71 

  The purpose of this paper was to investigate board-level committees created to oversee corporate social performance issues. We tried to gain more insight into: (1) potential determinants of the decision to create these committees; (2) types of social issue they oversee; (3) rules and procedures...

• The ethics of corporate governance. Nordberg, Donald // Journal of General Management;Summer2008, Vol. 33 Issue 4, p35 

  How should corporate directors determine what is the 'right' decision? For at least the past 30 years the debate has raged as to whether shareholder value should take precedence over corporate social responsibility when crucial decisions arise. Directors face pressure, not least from 'ethical'...

• The effect of corporate governance on sustainability disclosure. Michelon, Giovanna; Parbonetti, Antonio // Journal of Management & Governance;Aug2012, Vol. 16 Issue 3, p477 

  Drawing on stakeholder theory, this paper examines the relationship of board composition, leadership and structure on sustainability disclosure. We discuss that good corporate governance and sustainability disclosure can be seen as complementary mechanisms of legitimacy that companies may use to...

• Stakeholder Management, Reciprocity and Stakeholder Responsibility. Fassin, Yves // Journal of Business Ethics;Aug2012, Vol. 109 Issue 1, p83 

  Stakeholder theory advocates that firms bear responsibility for the implications of their actions. However, while a firm affects or can affect stakeholders, stakeholders can also affect the corporation. Previous stakeholder theorising has neglected the reciprocal nature of responsibility. The...

• Stakeholder Theory and "The Corporate Objective Revisited ". Freeman, R. Edward; Wicks, Andrew C.; Parmar, Bidhan // Organization Science;May/Jun2004, Vol. 15 Issue 3, p364 

  Stakeholder theory begins with the assumption that values are necessarily and explicitly a part of doing business. It asks managers to articulate the shared sense of the value they create, and what brings its core stakeholders together. It also pushes managers to be clear about how they want to...

• Acquired Disability and Returning to Work: Towards a Stakeholder Approach. Yue, Anthony R. // Journal of Workplace Rights;Jan2008, Vol. 13 Issue 1, p73 

  This article examines the potential application of stakeholder theory to the case of a disabled worker returning to work. A gated notion combining both the instrumental and ethical views of stakeholder theory is explored as a way to understand how to determine who may be classified as a...

Read the Article