Maximizing the Firm's Value to Society through Ethical Business Decisions: Incorporating 'Moral Debt' Claims

37 Pages Posted: 20 May 2008 Last revised: 27 Jun 2013

See all articles by Marco G. D. Guidi

Marco G. D. Guidi

University of Glasgow, Business School

Joe Hillier

Glasgow Caledonian University - Division of Accounting & Finance

Heather Tarbert

Glasgow Caledonian University - Division of Accounting & Finance

Abstract

We argue that all three forms of justice (economic, legal, distributive) require to be incorporated into the firm's business decisions in order to protect stakeholders' alienable and inalienable rights. In addition, the firm has "moral debt" obligations which require to be distributed fairly amongst all stakeholders. We develop a model that demonstrates that just distribution of stakeholders' "moral debt" and residual claims leads to the maximization of the firm's value to society in the long-run.

Keywords: Moral debt, Ethical business decisions, Distributive justice, Maximizing the firm value to society

JEL Classification: D23, G10, G30

Suggested Citation

Guidi, Marco G. D. and Hillier, Joe and Tarbert, Heather, Maximizing the Firm's Value to Society through Ethical Business Decisions: Incorporating 'Moral Debt' Claims. Critical Perspectives on Accounting 19 (2008) 603–619, Available at SSRN: https://ssrn.com/abstract=1135232

Marco G. D. Guidi (Contact Author)

University of Glasgow, Business School ( email )

Glasgow, Scotland
United Kingdom

Joe Hillier

Glasgow Caledonian University - Division of Accounting & Finance ( email )

Scotland
United Kingdom

Heather Tarbert

Glasgow Caledonian University - Division of Accounting & Finance ( email )

Scotland
United Kingdom
0141 331 3796 (Phone)

HOME PAGE: http://www.gcal.ac.uk/cbs/about/aaf/staff/tarbert.html

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