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This essay attempts to develop a new theoretical model for business ethics distinct from the two canonical business-ethics theories, the stakeholder theory and the shareholder value theory. Milton Friedman argued that because managers are agents of the company's owners, their sole moral responsibility is to maximize owner returns. Thomas Pogge has recently suggested that such a view involves a kind of moral incoherence and that we should reject the efficacy of social arrangements like the principal-agent relationship in altering moral obligations. Both views fail to give proper account of the dispersal of moral responsibilities in business contexts. We must distinguish “minimal moral obligations” (stemming from justice and rights) from “maximal moral obligations” (stemming from all other moral considerations, including duties of aid, beneficence, and the virtues). Minimal obligations apply to all persons, but maximal obligations can be effected by social arrangements like the owner-manager relationship. There may be moral obligations incumbent on owners that do not apply to managers. Understanding this distribution of responsibilities enables us to develop a new and attractive model of business ethics––“the ownership model”––which places greater emphasis on the rights and responsibilities of the owners of business than has been traditional in business ethics.

Keywords: Milton Friedman; Thomas Pogge; beneficence; business ethics; charity; corporate governance; corporate social responsibility; ethical investment; justice; responsibility; rights; shareholder value theory; stakeholder theory; virtue

Document Type: Research Article


Affiliations: Centre for Applied Philosophy and Public Ethics, CPO Box 8260, Australian National University, Canberra ACT 2601, Australia , Email:

Publication date: January 1, 2005

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