What Corporate Governance Can Learn from Catholic Social Teaching

Martijn Cremers ()
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Martijn Cremers: University of Notre Dame

Journal of Business Ethics, 2017, vol. 145, issue 4, No 4, 724 pages

Abstract: Abstract This reflection focuses on what insights Catholic Social Teaching (CST) can provide for corporate governance. I argue that the ‘standard’ agency theory is overly reductionist and insufficiently incorporates important economic limitations (such as asymmetric information, incomplete contracts, and the need for coordination) as well as human frailty. As a result, such agency theory insufficiently distinguishes firms from markets, which can easily relativize how we treat others and facilitate rationalization of unethical behavior. I then explore how three pillars of CST—human dignity, solidarity, and subsidiarity—can help overcome these limitations. CST proposes a vision of the business corporation as a community of persons, working together in cooperative business relationships toward the shared purpose of contributing to human flourishing.

Keywords: Corporate governance; Catholic Social Teaching; Human flourishing; Solidarity; Subsidiarity (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (8)

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DOI: 10.1007/s10551-016-3127-5

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