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Distributive Justice in Firms: Do the Rules of Corporate Governance Matter?

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  • Maitland, Ian

Abstract

Can we achieve greater fairness by reforming the corporation? Some recent progressive critics of the corporation argue that we can achieve greater social justice both inside and outside the corporation by simply rewriting or reinterpreting corporate rules to favor non-stockholders over stockholders. But the progressive program for reforming the corporation rests on a critical assumption, which I challenge in this essay, namely that the rules of the corporation matter, so that changing them can effect a lasting redistribution of wealth from stockholders to non-stockholders. This essay uses a critique of the progressive reform program to argue that the rules of the corporation are distributively neutral. The corporation isn’t rigged against non-stockholders, and changing its rules will not improve the bargaining power of non-stockholders. However, while the rules may be epiphenomenal from the standpoint of distributive justice, they can have substantial impacts on the corporation’s efficiency. As a result, the proposed reforms may hurt the corporation’s capacity to generate benefits for all the parties concerned.

Suggested Citation

  • Maitland, Ian, 2001. "Distributive Justice in Firms: Do the Rules of Corporate Governance Matter?," Business Ethics Quarterly, Cambridge University Press, vol. 11(1), pages 129-143, January.
  • Handle: RePEc:cup:buetqu:v:11:y:2001:i:01:p:129-143_00
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    Cited by:

    1. Christopher Cowton, 2011. "Putting Creditors in Their Rightful Place: Corporate Governance and Business Ethics in the Light of Limited Liability," Journal of Business Ethics, Springer, vol. 102(1), pages 21-32, March.
    2. Gregory Wolcott, 2015. "The New (Old) Case for the Ethics of Business," Journal of Business Ethics, Springer, vol. 132(1), pages 127-146, November.
    3. Travis Timmerman & Abe Zakhem, 2021. "Sweatshops and Free Action: The Stakes of the Actualism/Possibilism Debate for Business Ethics," Journal of Business Ethics, Springer, vol. 171(4), pages 683-694, July.
    4. Sandrine Blanc, 2014. "Expanding Workers’ ‘Moral Space’: A Liberal Critique of Corporate Capitalism," Journal of Business Ethics, Springer, vol. 120(4), pages 473-488, April.
    5. John R. Boatright, 2006. "What's Wrong—and What's Right— with Stakeholder Management," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 22(Spring 20), pages 106-130.
    6. Cao, Jidi & Chen, Xin & Qiu, Rui & Hou, Shuhua, 2021. "Electric vehicle industry sustainable development with a stakeholder engagement system," Technology in Society, Elsevier, vol. 67(C).

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