Doctors on Wall Street: A call for corporate responsibility through a sociological reconstruction of corporate law
Haverford College. Department of Sociology
Place of Publication
Table of Contents
“Maximizing short term stock price” has become the watchword of the modern corporation. A law and economic conception of corporate law does not allow for a meaningful characterization of multiple principal – single agent relationships. The result is that within corporate law, executives of public corporations have fiduciary duties towards shareholders that do not extend to other stakeholders. This characterization of corporate fiduciary responsibilities leads to a set of socially undesirable outcomes that compromise product quality, undermine worker’s safety, and damage communities. To prevent corporate irresponsibility executives must be granted the space to make decisions in the interest of all corporate stakeholders. This is only meaningful, however, if corporate law is grounded in a sociologically reconstructed economic theory that allows managers to act as fiduciaries for multiple constituents.