Corporate and public responsibility, stakeholder theory and the developing world

Abstract

It is often argued that multinational companies and other foreign developers have a responsibility to improve the material conditions of the people in whose territories they operate. As a matter of distributive justice it is thought that these companies should be sharing the acquired wealth with these people through the creation of ‘collective goods’ (like schools and aid posts), infrastructure development and compensation disbursements aimed at their benefit. Recently “stakeholder theory” and even legislative changes in the first world (especially in the US) have sought to impress on the corporate world the necessity to share the profits with affected “non‐shareholder” groups. Many see these developments as possible advancements for indigenous peoples, indigenous rights and the cause of distributive justice for aboriginal groups. However, it can be shown that the attribution of such ‘imperfect’ duties to corporations results in the generation of excessive costs and of unrealistic expectations on the part of stakeholders. Distributive justice is more efficiently achieved by public sector involvement at the level of policy and project management.