Progressive Corporate Law

By Lawrence E. Mitchell | Go to book overview

Because the threat of formal sanctions is remote, the most significant aspect of fiduciary law is symbolic and pedagogic. Even though fiduciary law would provide protection from opportunistic conduct, the need for trust remains because fiduciary duties must be self-enforcing to a large extent. A fiduciary struggling with her conscience to self-enforce moral norms will turn to fiduciary rhetoric for guidance about what is "right." At this point, the ethical language affects value choices by removing a source of rationalization for questionable conduct and reinforcing habitual compliance with standards of business morality. Specifically, the cognitive aspect of fiduciary law operates through poetic language seeking to inspire us to rise above our own self-interests by captivating our moral consciousness. This type of language is crucial to the law of fiduciary obligation because the duty of loyalty must be heartfelt.

The socializing force of fiduciary law would play an important role in enforcing implicit employment agreements. Under the existing legal regime, workers and managers may fail to develop a high degree of mutual trust because the law, and the cultural practices it makes possible, habituate the parties to certain ways of viewing their association. Whereas fiduciary duties have a tendency to foster stable patterns of cooperation, the lower duty of good faith that governs at-will employment may reinforce the counterpatterns of exploitation and conflict. Fiduciary law best transforms the gift-exchange aspects of implicit employment agreements into the language of the law because the heavy moral overtones of fiduciary obligation encompass the spirit of mutual respect, solidarity, and confidence that arise in the workplace. Under these new fiduciary obligations, the most effective managers will be those committed to recognizing that employee participation in workplace governance is valuable because it achieves human values by enhancing worker dignity. Workers may feel a moral obligation to reciprocate managers' trust by establishing higher effort levels, setting in motion a cycle of cooperative efforts on the shopfloor to promote X-efficiency in the firm.


Conclusion

As international competition intensifies. United States' firms are shifting away from adversarial labor relations in order to promote innovative shopfloor practices that rely upon flexible, team-based production methods. Firms seek to raise productivity by using shopfloor workers' first-hand knowledge and by entrusting workers with more responsibility to engage in problem-solving. Yet there is widespread fear that these efforts will not succeed due to the tensions and conflicts that arise from maintaining employee commitment to participatory work programs. At the same time that managers attempt to create cooperative workplace atmospheres, market pressures force managers to implement rapid corporate reconfigurations that threaten job security. This environment of

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Progressive Corporate Law
Table of contents

Table of contents

  • Title Page v
  • Contents vii
  • Foreword ix
  • Preface xiii
  • Note xv
  • Acknowledgments xvii
  • About the Editor and Contributors xix
  • 1: Communitarianism in Corporate Law: Foundations and Law Reform Strategies 1
  • Conclusion 30
  • Notes 31
  • 2: Working Toward a New Paradigm 35
  • Conclusion 59
  • Notes 60
  • 3: Some Observations on Writing the Legal History of the Corporation in the Age of Theory 67
  • Conclusion 84
  • Notes 86
  • 4: The Death of Contractarianism and the Vindication of Structure and Authority in Corporate Governance and Corporate Law 93
  • Introduction 93
  • Conclusion 105
  • Notes 106
  • 5: Experiencing Limited Liability: On Insularity and Inbreeding in Corporate Law 111
  • Introduction 111
  • Conclusion 130
  • Notes 130
  • 6: Game Theory and the Restoration of Honor to Corporate Law's Duty of Loyalty 139
  • Conclusion 168
  • Notes 169
  • 7: Trust. Contract. Process. 185
  • Conclusion--Trust as a Bedrock Value of Society 209
  • Notes 209
  • 8: Promoting Economic Justice in Plant Closings: Exploring the Fiduciary/Contract Law Distinction to Enforce Implicit Employment Agreements 219
  • Conclusion 234
  • Notes 236
  • 9: The Legitimacy of Multinational Corporations 247
  • Notes 266
  • 10: On the Frontier of Capitalism: Implementation of Humanomics by Modern Publicly Held Corporations -- a Critical Assessment 281
  • Introduction 281
  • Conclusion 303
  • Notes 307
  • About the Book 315
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