A Moral Stakeholder Theory of the Firm

To be a coherent and genuinely alternative conception to the shareholder model, any moral stakeholder theory must meet the following conditions: (1) It must be an ethical theory; (2) It must identify a limited group as stakeholders; (3) The group must be identified on morally relevant grounds; (4) Stakeholder claims must be nonuniversal; (5) And not held against everyone. A principle for identifying the stakeholder is suggested as a person who has much to lose -- financially, socially, or psychologically -- by the failure of the firm. The emerging picture contrasts sharply with the conventional conception of the firm.