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
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: Suggested Citation