Key Terms
Three Special Stakeholders
Society, the Environment, and Government
Limited liability
Owners' losses capped at their investment; personal assets protected.
LLC (Limited Liability Company)
Same liability protection as a corporation; organized more like a partnership.
Socializing a loss
Spreading a loss across society rather than absorbing it individually. This is what corporate status enables.
Quid pro quo
This for that. Society grants limited liability; corporations owe CSR in return.
Shareholder primacy
The position that maximizing profits for stockholders is the primary corporate duty.
Business judgment rule
Courts won't second-guess reasonable, good-faith corporate decisions.
Pro-CSR position
CSR creates a "halo effect" — consumers see CSR spending as a signal of product quality and are more willing to buy. Soc
Moral minimum
The baseline ethical threshold a business must meet to all stakeholders.
Fiduciary duty
High-level legal responsibility including duty of care and duty of loyalty.
Earth jurisprudence
An interpretation of law and governance based on the belief that society will be sustainable only if the environment is
Origins
Proposed by environmental attorney Cormac Cullinan; connected to the work of eco-theologian Thomas Berry. The term "eart
Three core tenets of earth jurisprudence
1. The Earth and all living things have fundamental rights, including the right to exist and have a habitat.
Tragedy of the commons
People consume free natural resources without regard for others or long-term effects.
Invisible pollution
Businesses often pollute secretly to avoid consequences. The only "witness" is the environment itself.