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Authority and Democracy in Corporate Governance?

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  • J. (Hans) van Oosterhout

Abstract

Although McMahon offers a potentially valuable extension of Joseph Raz's conceptualization of authority by distinguishing three different kinds of authority, this paper argues, first, that his account of the conditions and considerations that would justify managerial authority is problematic because it relies on a conception of reasons for action that excludes precisely the kind of rationality that plays an important role in theâ\x90£explanation and justification of authority in economicâ\x90£organization. This paper explains, second, why McMahon's thesis of the justificatory similarity of authority in governments and nongovernmental organizations can also be seen to hold for corporate governance of publicly owned firms more specifically. Finally, this paper raises some critical objections against McMahon's presumption of democratic governance in governments and NGO's alike. The thrust of these objections is that democratic corporate governance does not make sense in the publicly owned firms because: (1) it will not produce results that are fair or welfare maximizing, and (2) it will undermine the legitimacy of managerial authority in such firms. Copyright Springer Science+Business Media, Inc. 2007

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  • J. (Hans) van Oosterhout, 2007. "Authority and Democracy in Corporate Governance?," Journal of Business Ethics, Springer, vol. 71(4), pages 359-370, April.
    • Handle: RePEc:kap:jbuset:v:71:y:2007:i:4:p:359-370
    DOI: 10.1007/s10551-006-9146-x
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    1. repec:spo:wpmain:info:hdl:2441/4u6bdim0o89889eec3jg6jrk0v is not listed on IDEAS
    2. repec:hal:spmain:info:hdl:2441/4u6bdim0o89889eec3jg6jrk0v is not listed on IDEAS
    3. Marie-Laure Salles-Djelic & Helen Etchanchu, 2015. "Contextualizing Corporate Political Responsibilities: Neoliberal CSR in Historical Perspective," Post-Print hal-01891961, HAL.
    4. Marie-Laure Salles-Djelic & Helen Etchanchu, 2015. "Contextualizing Corporate Political Responsibilities: Neoliberal CSR in Historical Perspective," SciencePo Working papers Main hal-01891961, HAL.
    5. Marie-Laure Djelic & Helen Etchanchu, 2017. "Contextualizing Corporate Political Responsibilities: Neoliberal CSR in Historical Perspective," Journal of Business Ethics, Springer, vol. 142(4), pages 641-661, June.
    6. Steve Sauerwald & J. (Hans) Van Oosterhout & Marc Van Essen, 2016. "Expressive Shareholder Democracy: A Multilevel Study of Shareholder Dissent in 15 Western European Countries," Journal of Management Studies, Wiley Blackwell, vol. 53(4), pages 520-551, June.

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