The Social Responsibility of Corporate Management: A Classical Critique



Date of this version


Document Type



Corporate social responsibility, Social responsibility of business, Shareholder benefits, Fiduciary duties


Calls for corporate social responsibility are widespread, yet there is no consensus about what it means; this may be its charm. However, it is possible to distinguish the fi duciary obligations owed to shareholders, as expressed by Milton Friedman, from all other paradigms of corporate responsibility. Friedman maintains that: “ ...there is one and only one social responsibility of business‐to‐use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud.” All other paradigms argue that corporations have social responsibilities that extend beyond the pursuit of shareholder benefits to stakeholders. The list of cited stakeholders is ill‐defined and expanding, including non‐human animals and non‐sentient things. This paper defends the intellectual and ethical merits of fiduciary duties, and compares and contrasts it to the stakeholder paradigm. The fiduciary duty to firms’ owners is the bedrock of capitalism, and capitalism will wither without it.

Published in

American Journal of Business

Citation/Other Information

Philip R. P. Coelho, James E. McClure, John A. Spry, (2003) "The Social Responsibility of Corporate Management: A Classical Critique", American Journal of Business, Vol. 18 Issue: 1, pp.15-24, doi: 10.1108/19355181200300001