A COMMENTARY ON Gordon G. Sollars and Sorin A. Tuluca (2018), “Fiduciary Duty, Risk, and Shareholder Desert,” Bus Ethics Q 28(2): 203–218, https://doi.org/10.1017/beq.2017.47
Shareholders assume risk by investing. Sollars and Tuluca (2018) argue that while this does not justify a managerial policy of shareholder wealth maximization, it does justify compensating shareholders at the often- calculated cost of equity—the cost that investors require given the level of risk they assume. Here, I show that this can be unfair if the cost of equity is unfair. I then show how shareholder wealth maximization as a managerial imperative is better justified on other grounds.
To download the full PDF, click here: Silver on Sollars and Tuluca
Kenneth Silver is an Assistant Professor in Business Ethics within Trinity Business School at Trinity College Dublin, The University of Dublin.
BEJR is now in its third year of publishing, and we’ll be launching Volume 3 tomorrow with the publication of a commentary on leadership ethics by Shazia Khan, a PhD Candidate (Management) in the Management Sciences Department at the COMSATS Institute of Information Technology in Islamabad, Pakistan.
As we enter our third year, and as the popularity and influence of BEJR grow, it becomes increasingly important to ground the journal in a set of institutional arrangements that will provide it with a firm foundation. So starting with Volume 3, BEJR will now be published by the nonprofit Journal Review Foundation of the Americas, which was founded by BEJR‘s editors. Nothing is changing in terms of policies and practices, but having a formal, nonprofit entity act as BEJR‘s publisher should help provide a stable foundation for the future.
Peter Jaworski is Assistant Teaching Professor of Business Ethics in Georgetown University’s McDonough School of Business. He’s the author of “Moving Beyond Market Failure: When the Failure is Government’s”, published in BEJR in February of 2013 and downloaded 300 times since then in PDF format.
BEJR co-editor, Alexei Marcoux, caught up with Peter to talk to him about his experience publishing in BEJR and his current projects.
Alexei Marcoux: What inspired you to submit a Commentary to BEJR?
Peter Jaworski: I thought it would be a great way to engage with the literature. I didn’t have a significant criticism, just a small disagreement. I thought BEJR would be perfect for that. And I was right.
AM: Was your Commentary in BEJR part of a larger project? What was it?
PJ: In my case it was. I ended up writing a longer piece [Journal of Business Ethics, “An absurd tax on our fellows”] that expands on and refines my comments for BEJR. Reading the response to my Commentary gave me the opportunity to clarify my meaning and, I think, to more relevantly engage with the material. I’m still interested in that broader project — of discussing rent seeking and crony capitalism as a government failure, of more importance to our understanding of the professional obligations and role morality of politicians and government actors, rather than thinking of it as a problem for market actors.
AM: How did writing for BEJR fit into your workflow?
PJ: Sometimes, when reading an article, I write a few pages in response to that article. Like when you have a nagging criticism, or just a small worry, or what you hope is a clarification or better way of putting something. I think we all probably do that. That doesn’t always turn into a larger project. And with BEJR, it doesn’t have to be a bigger project. So it fit in brilliantly.
AM: What was the editorial experience like?
PJ: Is this where I say nice things about you and Chris? There’s some sort of journalistic problem with you asking me this question, I’m sure, but I’ll answer anyways: It was great. Feedback came quickly, a decision was faster than any place else I’ve ever submitted to, and the instructions were clear. A model for others to follow, I’d say.
AM: Did your Commentary get some attention on social media? We try hard to get the word out about everything we publish. Did it work?
PJ: Yes, some. I think a lot of people read it, and I did get more email on account of it than anything else I’ve published in an academic journal.
PJ: You know, Joe Heath really sparked a strong interest on my part in business ethics. He wasn’t alone, but I look forward to reading his articles because each time I feel like he’s onto something important, significant, and is making moves in the literature that push all of us forward. So it was exciting to see his Response (even though it was a pretty grumpy response overall).
AM: How has being published in BEJR changed your attitude toward publishing?
PJ: That’s a bit of a tough question. It’s changed my attitude about what publishing might be like. I love how fast and responsive the process was at BEJR, which I’d like to see copied at other places. In a way, it makes me realize that it’s at least possible to have an academic conversation, in print, with others where the turnaround time for salvos is less than 12 months.
AM: What are you working on currently?
PJ: Most importantly, I’m working in the moral limits of markets research area. With my colleague, Jason Brennan, I have an article forthcoming in Ethics entitled “Markets without Symbolic Limits,” and we expect to publish our book, Markets Without Limits: Commercial Interests and Moral Virtues, in October of this year. I hope this helps spark some interest, and so I expect to spend my 2015 talking about markets in kidneys in blood and about commercial surrogacy and so on. Apart from that research area, I’m also active in issues surrounding “ownership.” I’m interested in whether or not we can continue to claim an ownership stake in some object after some passage of time, and I’m interested in what objects or things in the world are “fit” for the ownership relation (rather than guardianship, or stewardship, for example).
You can see Peter in action in this Learn Liberty video, “Should Collegiate Athletes Be Paid?”
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Abraham Singer is a PhD student at the University of Toronto’s Department of Political Science. He’s the author of “What is the Best Way to Argue Against the Profit-Maximization Principle?”, published in BEJR in May of 2013, and which has been downloaded 137 times since then in PDF format.
BEJR co-editor, Chris MacDonald, sat down with Abe to talk to him about his experience with the journal.
Chris MacDonald: What inspired you to submit a Commentary to BEJR?
Abe Singer: I decided to submit a Commentary to BEJR because it was a quick way to engage in a scholarly debate. I mean quick in two senses: quick because BEJR wants short commentaries, so I knew I didn’t need to worry about crafting a huge, intricate paper with dozens of citations; and quick because the turnaround is incredibly fast. That was really attractive to me.
CM: Was your Commentary in BEJR part of a larger project?
AS: Sort of. The commentary I wrote for BEJR was a response to a paper that criticized profit-maximization as a default corporate objective. The author — Waheed Hussain — was arguing that this objective limits the various pursuits corporations might wish to pursue and therefore violates liberal freedom. The larger project I was, and am, working on (my dissertation) is on the relationship between political theory and the corporation, so I’m interested in questions about the ethics of capitalism and the profit-maximization principle. That being said, crafting a specific response to this type of argument was not on my short-term agenda. My work is largely focused on criticizing Chicago economics’ emphasis on profit and shareholder wealth; so I actually agreed with Waheed’s conclusions, but not the form of his argument. I wouldn’t have taken the time to argue about the nitty-gritty details with someone I generally agreed with had there not been a venue like BEJR that made that so feasible.
CM: How did writing for BEJR fit into your workflow?
AS: I literally wrote my Commentary as a way to avoid grading mid-term exams. The first draft took an afternoon at most. It beat the hell out of correcting undergraduate ruminations on Hobbes! Who says procrastination isn’t productive?
CM: What was the editorial experience like? Did we live up to our promises?
AS: For sure. I think the turnaround was a week or so. The review gave good and helpful comments that made my points stronger and clearer. The Commentary was published about two weeks later. Super fast!
CM: Did your Commentary get some attention on social media? We try hard to get the word out about everything we publish. Did it work?
AS: My Commentary was publicized on Facebook and got lots of “likes” from people who I respect in the field. I’m not on Twitter, but friends told me it was getting lots of publicity there too.
AS: It felt like an affirmation. When you’re in grad school it’s easy to feel isolated and unsure of whether you are progressing along the right track. This is true generally, but it’s especially true if you are studying business ethics type stuff in a discipline like political science where that is not a traditional object of study. So it felt good to have an established scholar engage with my Commentary.
CM: Beyond Hussain’s response, what kind of feedback or attention have you received, based on your Commentary?
AS: There have been times since then, at business ethics conferences, when people will tell me they read my commentary in BEJR and we’ll start discussing issues related to the idea of profit-maximization, or corporate objectives in general. That is the best part — that the commentary leads to more debate and conversation. A friend also recently punched my name into Google Scholar and discovered that my BEJR Commentary is cited in an Italian research document of some kind. So the “Singer-Hussain” debate has continental legs, apparently!
CM: As a junior scholar, how has being published in BEJR helped you and your career?
AS: Well, I’m still a lowly PhD candidate, so it is perhaps too soon to tell. That said, I definitely think I am taken more seriously as an academic and a professional by virtue of having engaged in this way. Aside from a line on my CV — which is obviously a very good thing, because I’m currently on the job market — having published a peer-reviewed Commentary is evidence that you are serious about scholarship, and that you’re engaged in the field. Again, this is especially important being a graduate student in a political science department. It has led to some important institutional affiliations, and co-authored projects (currently in progress) with scholars I greatly admire.
CM: How has being published in BEJR changed your attitude toward publishing?
AS: This is probably the most important benefit of publishing the commentary with BEJR: it pretty much eliminated the mystique associated with scholarly publishing, and lowered the psychological barriers. When you’re a grad student, publishing can seem like a far-off goal that is exclusively the domain of the accomplished scholars you study under. It’s intimidating. Publishing something in BEJR was great because after doing that I felt like, “Oh, I can do this!” That isn’t to say publishing is easy, or that I now approach it lackadaisically. But it helped make publication feel more like something I am capable of doing, and something I ought to be aiming for.
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“The Principles Approach Is a Big Tent Approach” by John Hasnas
A RESPONSE TO Gregory Wolcott (2014), “Business Ethics and Ideals”, Bus Ethics J Rev 2(6): 36–41.
Abstract: In his Commentary on my Principles Approach, Gregory Wolcott (2014) worries that the approach leaves no room for ethical theory and decries the tendency of business school faculty to derive ethical conclusions from legal standards. However, the Principles Approach is, by design, open to supplementation by ethical theory and has the virtue of providing a basis for making ethical assessments of legal standards.
To download the full PDF, click here: Hasnas Responds to Wolcott.
“Business Ethics and Ideals” by Gregory Wolcott
A COMMENTARY ON John Hasnas (2013), “Teaching Business Ethics: The Principles Approach”, J Bus Ethics Ed 10: 275–304.
Abstract: John Hasnas (2013) argues for a “Principles Approach” to supplant normative theory and casuistry in business ethics pedagogy. This Commentary argues some normative theory ought still to have some place in business ethics education and that the problems Hasnas sees in business ethics pedagogy only tell half the story.
To download the full PDF, click here: Wolcott on Hasnas.
“Once More On Re-Conceiving Management as a Domain-Relative Practice:
A Response to Sinnicks” by Gregory Beabout
A RESPONSE TO Sinnicks (2014), “Mastery of One’s Domain Is Not the Essence of Management”, Bus Ethics J Rev 2(2): 8–14.
Abstract: Matthew Sinnicks has attempted to cast doubt on my efforts to extend MacIntyre’s virtue ethics with regard to re-conceiving management as a domain-relative practice. However, rather than weakening my argument, his objections provide an opportunity to clarify a key distinction, address several misunderstandings, respond to criticisms, rectify misrepresenta- tions, and show again that MacIntyre’s virtue ethics provides a fertile framework for re-casting issues of management and business ethics, including a transformed understanding of management as a domain- relative practice.
To download the full PDF, click here: Beabout Responds to Sinnicks.