Fiduciary Duty : Developing a Morally Worthy Account of an Economic Agent’s Duties to Stakeholders

Sammanfattning: Fiduciary Duty is the legal obligation that economic agents must act in the best interests of their beneficiaries, however the legal definition is vague. There are two general categories of ways of interpreting Fiduciary Duty. The dominant, so-called narrow interpretation binds an economic fiduciary to act in the best financial interests of their beneficiaries. There are also broader interpretations which attempt to account for the welfare and/or ethical priorities of the beneficiaries. The narrow interpretation favors the sole prioritization of profit motivation while the broad interpretations favor environmental and social considerations above profit. The historical legal favor enjoyed by the narrow view seems to, at least in part, allow and even encourage the unsustainable exploitation of natural and social resources. On the other hand, favoring broad interpretations seems to undermine the pecuniary interest inherent in the act of investment. In this paper, I will formulate an alternative account of fiduciary duty by analyzing the underlying ethical desiderata put forward by both categories of interpretations and suggesting a synthesis of the views considered. Using John Stuart Mill's Harm Principle, I outline where sufficient conditions are met in investment decisions to make profit motivation a secondary consideration. While the primary ethical framework I will adopt is most influenced by Rawls' contractarianism, I will support my view by showing that my account of fiduciary duty is favorable on several ethical perspectives over existing broad and narrow interpretations, namely deontological, utilitarian, and consequentialist points of view. My conclusion suggests a few possible actions for the goals of future legislation surrounding the economic agent's relationship to their beneficiaries. One, that environmental and social considerations by economic agents are both prudent and loyal to their beneficiaries, meeting the criteria outlined in fiduciary duty. Therefore, taking such considerations in business decisions should not be punishable as it currently is in many jurisdictions. Second, regulations should be proposed that either: A. Restricts investments enabling economic agents that are prone to environmental and social abuses, or B. Makes the beneficiary explicitly aware of the agent’s questionable business practices before they make the decision to invest. My proposed revision of fiduciary duty therefore aims to provide a philosophical framework for current market regulators to respond to environmental and social challenges facing our planet that are posed by economic agents.