Found 19 article(s) for author 'Business ethics'

Recovering the Logic of Double Effect for Business: Intentions, Proportionality, and Impermissible Harms

Recovering the Logic of Double Effect for Business: Intentions, Proportionality, and Impermissible Harms. Nien-hê Hsieh, 2020, Paper, “Business actors often act in ways that may harm other parties. While the law aims to restrict harmful behavior and to provide remedies, legal systems do not anticipate all contingencies and legal regulations are not always well-enforced. This article argues that the logic of double effect (LDE), which has been developed and deployed in other areas of practical ethics, can be useful in helping business actors decide whether or not to pursue potentially harmful activities in commonplace business activity. The article illustrates how LDE helps to explain the exploitative nature of payday lending, the distinction between permissible and impermissible forms of market competition, and the potential wrong of imposing risk of harm on others. The article also addresses foundational debates about LDE itself. We offer the article as an illustration of the sort of “midlevel” theorizing that can address directly the needs of practitioners.Link

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Why America’s CEOs Are Talking About Stakeholder Capitalism

Why America’s CEOs Are Talking About Stakeholder Capitalism. Mark Roe, November 4, 2019, Opinion, “When the US Business Roundtable recently renounced shareholder primacy, the shift – by an organization representing companies with combined annual revenue of more than $7 trillion – prompted a wide range of reactions, from welcoming to dismissive. But the move is primarily an attempt to keep activist shareholders and populist politicians at bay.Link

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Why is Corporate Virtue in the Eye of The Beholder? The Case of ESG Ratings

Why is Corporate Virtue in the Eye of The Beholder? The Case of ESG Ratings. George Serafeim, Anywhere Sikochi, November 2019, Paper, “Despite the rising use of environmental, social, and governance (ESG) ratings in financial markets, there is substantial disagreement across rating agencies regarding what rating to give to individual firms. As what drives this disagreement is unclear, we examine the extent to which a firm’s ESG disclosure and average ESG rating explain this disagreement. Contrary to conventional wisdom that greater disclosure helps reduce disagreement, our findings suggest that greater ESG disclosure leads to greater disagreement across ESG rating agencies. These findings hold using firm fixed effects, changes models, and using a difference-in-differences design with staggered mandatory ESG disclosure shocks. We also find that rating disagreement is greater when firms have high or low average ESG ratings, relative to firms with medium average ESG ratings. Overall, our findings highlight the difficulty that firms face in resolving ESG rating disagreement and the need for developing rules and norms for evaluating ESG information.Link

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Pathways to Materiality: How Sustainability Issues Become Financially Material to Corporations and Their Investors

Pathways to Materiality: How Sustainability Issues Become Financially Material to Corporations and Their Investors. George Serafeim, 2019, Paper, “As sustainability issues, also labelled environmental, social and governance (ESG) issues, become financially material, companies, investors and regulators are designing strategies and policies to improve sustainability disclosure and performance. In this paper, we outline a framework of how sustainability issues become financially material arguing that materiality is not a “state of being” but a “process of becoming.” Our framework could assist companies and investors to make resource allocation decisions based on expectations about future materiality, social entrepreneurs and NGOs to develop their theories of social change, and policy makers to design disclosure regulations. Moreover, our framework generates predictions about the conditions under which sustainability issues become financially material that could be empirically tested in the future.Link

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Stock Market Distress Signal: How Low-Cost Index Funds Are Taking Over

Stock Market Distress Signal: How Low-Cost Index Funds Are Taking Over. John Coates, December 12, 2018, “Sounding the alarm on index funds. How their runaway success has reshaped power and accountability in boardrooms and on Wall Street. Guests – John Coates, professor of law and economics at Harvard Law School where he teaches corporate governance, mergers and acquisitions and finance. Member of the Investor Advisory Committee of the Securities and Exchanges Commission. (@jciv) Link

 

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The social purpose of corporations

The social purpose of corporations. Nien-he Hsieh, November 13, 2018, Paper, “To think about the purpose of corporations is to think about what corporations are for. In the article, argue that the concept of a purpose has an important role in thinking about the moral evaluation of corporations. We make three contributions. First, we distinguish different uses of the concepts of social and corporate purpose. Social purpose concerns the contribution that the corporation makes to realising societal goals. Corporate purpose concerns the goals the corporation should actively pursue. Second, we investigate whether corporations ought to serve a social purpose and whether corporations ought to actively pursue their corporate purpose. Third, we explore critically what roles the concepts of social and corporate purpose can fulfil in moral reflection on and of corporations. In particular, we distinguish the constructive, the communicative, and the critical role of social and corporate purpose.Link

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What Would It Take to Get Businesses to Focus Less on Shareholder Value?

What Would It Take to Get Businesses to Focus Less on Shareholder Value? Rebecca Henderson, August 21, 2018, Opinion, “Last week, Massachusetts Senator Elizabeth Warren announced that she’s about to propose the most significant change in U.S. corporate governance in 100 years. We don’t yet have the full details, but one reading of her piece is that she’s going to propose requiring every company with more than $1 billion in revenue to become a “benefit corporation” — a corporation whose fiduciary duty is not only to its shareholders but to all its major “stakeholders.”Link

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The Right Way for Companies to Publicize Their Social Responsibility Efforts

The Right Way for Companies to Publicize Their Social Responsibility Efforts. Michael Kremer, April 2, 2018, Opinion, ““Why don’t we get credit for all the good things we do?” the CEO of a major global corporation asked me recently. After all, the company has innovative and impactful programs to ensure safe working conditions; training programs to help low-wage workers in its supply chain increase their earnings; numerous environmental initiatives to reduce its use of water, energy, and raw materials; diversity and volunteering programs for employees; and a foundation that makes generous contributions both locally and globally. Yet no one seems to notice.Link

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More and More CEOs Are Taking Their Social Responsibility Seriously.

More and More CEOs Are Taking Their Social Responsibility Seriously. Rebecca Henderson, February 12, 2018, Opinion, “Jana Partners, the activist hedge fund, isn’t known as a tree-hugging hippie sort of firm. Yet, last month it joined with the California State Teachers’ Retirement System to send a letter to Apple’s board warning about the effects of the company’s devices on children. The same month, Blackrock CEO Larry Fink sent a letter telling companies that his firm would consider social responsibility when making investments. And Mark Zuckerberg told investors that Facebook would be making changes to its platform that would help users in the long-term, even though, he warned, in the short-term the result would be users spending less time on it.Link

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Wells Fargo’s board members are getting off too easy

Wells Fargo’s board members are getting off too easy. Lawrence Summers, February 6, 2018, Opinion, “A question I am asked as frequently as any other is: “Why didn’t anyone go to jail for the financial crisis?” There was huge suffering, sufficient misbehavior that the largest banks had to pay well over $100 billion in fines, and in the past, people had gone to jail for financial shenanigans during the Depression and the S&L crisis. People are usually indignant as they ask the question.Link

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