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Boer, E.H. de

Ethics, Social and Political Philosophy

Corporate Trust and Trustworthiness

This paper proposes a concept of corporate trust and trustworthiness based on individual autonomy and individual trust. Corporations are part of society and therefore are parties to the social contract. Corporations can be seen as a nexus of contracts between stakeholders and as such they need to meet the reasonable expectations that these stakeholders have about the corporation. These expectations concern the corporation’s intentions and its competence in balancing its own interests with those of its stakeholders and society as a whole.

In the first chapter of this paper I discuss Integrated Social Contract Theory (ISCT) as a background theory on how corporate contracts fit within the general social contract. ISCT describes the hypothetical social contract as a macro contract and real contracts are called micro contracts. ISCT can be combined with normative stakeholder theory to define the contractants to these micro contracts. They are individuals or groups of individuals that will bargain with the corporation for fair agreements to advance their own interests. The corporation is defined as a nexus of contracts. The corporate nexus of contracts I describe is not only motivated by economic rationality but also by individual autonomy. The conclusion of the first chapter is that the corporation is a nexus of contracts between stakeholders within society.

In the second chapter I argue that trust can be based on a self-interested account depending on the situation. Partly based on Katherine Hawley’s ideas on trust I argue that trust is about fulfilling the reasonable expectations of others and in particular fulfilling the commitments that were made by the parties involved. Both Philip Pettit and Russell Hardin argue, separately, for a more theoretical approach to trust and trustworthiness. Trustworthy parties give others reasons why they should be trusted. Trust out of self-interestedness is based on reasons of prudence, reputation and relation.

Finally, in the last chapter I argue that this definition of trust and trustworthiness can be applied to the corporation because it is a nexus of contracts between self-interested (groups of) individuals. What matters most is that the contracts that make up a corporation depend on a concept of trusting relationships between individuals or groups of individuals. The main conclusion of the paper is that corporations have rational and self-interested reasons to take the interests of stakeholders as their own and for that reason we can speak about corporate trust and trustworthiness.

Last modified:27 October 2014 3.06 p.m.