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Business Ethics Quarterly

Volume 17, Issue 4, October 2007

Cynthia Clark Williams, Lori Verstegen Ryan
Pages 669-688
DOI: 10.5840/beq20071744

Courting Shareholders
The Ethical Implications of Altering Corporate Ownership Structures

The relationship between corporate executives and shareholders has riveted the attention of business ethicists since the inception of the field. Most ethicists agree that corporate executives owe their investors the duties of loyalty, candor, and care. These fiduciary duties undergird the promises made to shareholders at the time of incorporation, placing on executives moral obligations to engage in fair dealing and to avoid conflicts of interest. We concur that executives owe all of their existing shareholders both promise-keeping and fiduciary duties and argue that some corporate executives violate these responsibilities by attempting to withhold information from or limit information to some shareholders while courting others. We analyze the ethical implications of six techniques and tools that executives use to attract certain types of shareholders while deterring others. We conclude with recommended structural and behavioral changes to these current managerial and investor practices.

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