به حداکثر رساندن ارزش شرکت برای جامعه از طریق تصمیمات اخلاقی کسب و کار : گنجاندن ادعای "بدهی اخلاقی"

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.

Authors of corporate finance literature argue that the main objective of the firm is shareholder wealth maximization (see for instance, Brealey and Myers, 2000 and Copeland and Weston, 1992). Shareholder wealth maximization is usually defined as the maximization of the discounted cash flows, whether in the form of dividends or capital gains, over time. Clarkson (1991) argues that the concept of shareholder wealth maximization is being replaced with the concept of stakeholders’ wealth maximization through moral corporate behaviour and decision making (see also Stiglitz, 2006 and Donaldson and Dunfee, 2002). Clarkson (1991, p. 190) defines stakeholder groups as those that are “actively or passively involved in the corporation's activities, those groups, in effect, without whom the corporation could not operate or make a profit, and those groups who may be affected by the corporation's actions.” In contrast to shareholder wealth maximization, stakeholder wealth maximization is based on the premise that not one group of individuals are made better off while some other group of individuals are made worse off. As Jensen (2001, p. 304) states “the real issue to be considered here is what firm behavior will result in the least social waste – or equivalently, what behavior will get the most out of society's limited resources – not whether one group is or should be more privileged than another” (see also Pieper, 1966 and Steiner, 1999). In order to reconcile the idea of shareholder or stakeholder wealth maximization with minimum social waste, business decisions of the firm would need to be ethical. As Pieper (1966, p. 6) points out quite distinctively “virtue is a ‘perfected ability’ of man as a spiritual person; and justice, fortitude, and temperance, as ‘abilities’ of the whole man, achieve their ‘perfection’ only when they are founded upon prudence, that is to say the perfected ability to make right decisions.” Ethical business decisions are defined as decisions which would maximize the value of the firm to society. Thus, the “nexus contracts that constitute the firm” (Boatright, 2002, p. 1849) would require to incorporate all three forms of Justice (Pieper, 1966 and Wilson, 1991): economic, legal, and distributive. If the firm does not make Pareto optimal business decisions then all three forms of justice are not incorporated which implies that stakeholder rights will be violated due to unfair redistribution of residual1 and non-residual claims. Stiglitz (1981) argues that Pareto optimal efficient market exists when there is no feasible allocation of resources which can make some individual better off without making someone else worse off. Thus, the marginal social cost of a firm's activity increases with no corresponding marginal increase in social benefit. In order to achieve business decisions that are Pareto optimal, three forms of justice would require to be integrated into business decisions (Pieper, 1966 and Wilson, 1991): • Economic justice can be defined as the right to receive the equivalent for a service rendered or reparation for a loss sustained. Jensen and Meckling (1998) observe that the market system is based on the ownership of private alienable2 (property) rights and the ability to capture proceeds from decisions to sell these rights thus capturing the benefits from exchange of goods or services. • Legal justice3 can be defined as the individual's or the organization's obligation which “relates to the fairness of participation by individuals in the economic system” (Wilson, 1991, p. 206). Furthermore, Rose-Ackerman (2002) observes that the firm's legal personality gives the same obligation as that of the individual towards society (see also Bowie, 1991). • Distributive justice can be defined as “the allocation of the benefits of an economic system among all the members of that system” (Wilson, 1991, p. 206). The firm redistributes4 claims owed to stakeholders in respect to their alienable or inalienable5 rights ensure these business decisions are not Pareto optimal for society. Nothing belongs to the individual as exclusively theirs; all that belongs to them is a share in something common to everyone. The purpose of distributive justice is to ensure that rights and claims are equitably distributed (Feldman, 1971 and Pieper, 1966). Pieper (1966, p. 72) observes that all three forms of justice incur “some kind of indebtedness.” This indebtedness can be thought of as the firm's obligation to protect the alienable and inalienable rights of its stakeholders, which can only be achieved by integrating economic, legal and distributive justice into its business decisions. The integration of the three forms of justice are necessary but not sufficient to discharge the firm's total indebtedness. In addition, the ‘moral debt’ obligation would also require to be met by the agents of the firm. The concept of ‘moral debt’ has been discussed by Thomas Aquinas who distinguishes “between a demand of justice that is legally binding and a demand of justice that is (only) morally binding. I can be compelled to fulfill the first obligation; carrying out the second depends only on my own sense of decency” (Pieper, 1966, p. 57). Therefore, ‘moral debt’ arises when the firm takes rights from other stakeholders has their own. In other words, ‘moral debt’ originates when the firm takes a benefit from others through not fulfilling just business decisions (where just means protecting both alienable and inalienable rights).6 Therefore, the business decisions of the firm would need to incorporate the ‘moral debt’ claims of stakeholders and so the total value of the firm to society would require to include all associated ‘moral debt’ claims. The incorporation of ‘moral debt’ expands Jensen (2001) definition of total market value where the traditional definition of total value to society is the market values of all the financial claims (including equity, debt, preferred stock, and warrants, current liabilities including wages, taxes, and accounts payable). Theoretically, according to Boatright (2002, p. 1842), stakeholders’ are “free to bargain with the firm over the most effective means for protecting its rights.” Reiter (1997, p. 616) states the nexus-of-contracts theory indicates a view of the firm that has “perfect contracting relationships” and where owners and managers are assumed to have bounded rationality and self-interested motives. However, the stakeholder theory argument seems incomplete and inadequate in defining and assigning the set of rights based on implicit and explicit ‘moral debt’ and the need for protection of rights (Donaldson and Dunfee, 2002). In fact, Sutton and Arnold (1998, p. 255) point out that in the U.S. slavery survived because of “unjust, but accepted and enforceable, economic contracts.” Current financial economic thinking is based on the belief that market forces represent natural forces with beneficial powers in allocating resources that ensures ethical business decisions (Reiter, 1997). In contrast, there is strong economic argument that society requires to engage in the process of writing laws and regulations, and ultimately to encourage the enforcement of these laws for better stakeholder rights protection (La Porta et al., 2001, Stultz and Williamson, 2003, Shleifer, 2005 and Stiglitz, 2006). The market system alone ultimately does not provide Pareto optimal outcomes because not all rights can be defined, assigned and protected properly in the nexus of contracts that make up the firm7 (Feldman, 1971, Hart and Moore, 1999, Newbery and Stiglitz, 1982, Newbery and Stiglitz, 1984 and Stiglitz, 1981). Newbery and Stiglitz (1982, p. 243) have shown “that even when individuals have rational expectations – they have fully absorbed all the information which is available on the market and they use it efficiently in making production decisions – the market equilibrium is, in general, not even a constrained Pareto optimum.” In addition, the fact that the firm does not take ethical business decisions, which are Pareto optimal, produces ‘moral debt’ claims in the contracts that define the firm. The main aims of this paper are to argue for the consideration of ‘moral debt’ obligations and to formalize a model which demonstrates that just distribution of stakeholders’ residual and ‘moral debt’ claims leads to the maximization of the firm's value to society in the long-run. The remainder of this paper is structured as follows. In Section 2, we discuss the role of market and legal systems on social contracts and the asymmetric nature of business decisions. In Section 3, we discuss going beyond the legal and market systems in protecting rights and supporting the firm in ethical business decisions. In Section 4, we discuss the ‘moral debt’ distribution model, the underlying assumptions and implications ‘moral debt’ claims in relation to stakeholders’ rights, fair distribution of wealth8 and value-resetting/over-valuation9 of the firm's equity. In Section 5, we discuss the relationship between externalities and redistribution of wealth due to ‘moral debt’ claims and the need for informed consent for Pareto optimal business decisions. In Section 6, concludes.

To achieve the maximization of the firm's value to society would require the integration of stakeholders ‘moral debt’ claims into business decisions. Logically, the firm that maximizes its value only for shareholders incurs ‘moral debt’ claims from other stakeholders, which will make the firm less valuable to society. Due to the unique wealth generating power of the firm, we argue that there is a moral obligation to incorporate the three form of justice and, in particular, the ‘moral debt’ claims of those stakeholders who do not have the legal or financial power to enforce their inherent alienable and inalienable rights. As can be seen from the ‘moral debt’ model, the redistribution of claims from stakeholders to shareholders pushes society's payoff line to the right and reduces the value of the firm to society by over-valuing the firm's shares. The value of the firm to society can only increase if those in power (shareholders, directors, governments) go far beyond the current corporate governance mandates and recognize that their business decisions will incur ‘moral debt.’ The explicit acknowledgment and incorporation of ‘moral debt’ claims will ultimately increase the value of the firm to society.