FIGURE 5.

1
MAP OF CORPORATE STAKEHOLDER ACCOUNTABILITY

Shareholders:
Current, Future,
Ethical …

Activists Employees

Governments Corporation Customers

Creditors Suppliers

Lenders Others, including the Media, who can be

affected by or who can affect the achievement
of the corporation’s objectives

L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004.
TABLE 5.1
FUNDAMENTAL INTERESTS OF STAKEHOLDERS
Well-offness The proposed decision should result in more
benefits than costs.
Fairness The distribution of benefits and burdens should
be fair.
Right The proposed decision should not offend the rights
of the stakeholders and the decision maker.
All three interests must be satisfied for a decision to be considered ethical.

L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004.
TABLE 5.2
COST-BENEFIT ANALYSIS: SHORT- AND LONG-TERM PROFIT IMPACT
POLLUTION CONTROL UNIVERSITY ADMISSION
EQUIPMENT SCHOLARSHIPS
IMPACT ON PROFIT IMPACT ON PROFIT
Short- Long- Total Short- Long- Total
Term Term Term Term
Benefits (Present Valued at 10 percent) $500,000 $500,000
Reduction in worker health costs $200,000 $200,000
Increase in worker productivity
Improvement in level of earnings of $600,000 $600,000
scholarship recipients
Total benefits $200,000 $500,000 $700,000 $600,000 $600,000
Costs (Present valued at 10 percent)
Pollution equipment $350,000 $350,000
Scholarships paid $400,000 $400,000
Total costs $350,000 $350,000 $400,000 $400,000
Net benefit-costs ($150,000) $500,000 $350,000 ($400,000) $600,000 $200,000

L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004.
FIGURE 5.2
STAKEHOLDER IDENTIFICATION AND INTERESTS

POWER LEGITIMACY

Dynamic
Influence

URGENCY

SOURCES: Mitchell, Agle and Wood, 1997; Rowley, 1997.

L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004.
TABLE 5.4
APPROACHES TO THE MEASUREMENT OF
QUANTIFIABLE IMPACTS OF PROPOSED DECISIONS*

A. Profit or loss only

B. A. plus externalities,
(i.e. Cost-Benefit Analysis/CBA)
C. B. plus probabilities of outcomes,
(i.e. Risk-Benefit Analysis/RBA)
D. CBA or RBA plus ranking of stakeholders
*Optimal decisions usually result from the most thorough approach.

L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004.
TABLE 5.4
STAKEHOLDER RIGHTS

Life
Health and safety
Fair treatment
Exercise of conscience
Dignity and privacy
Freedom of speech

L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004.
TABLE 5.5
5-QUESTION APPROACH TO ETHICAL DECISION MAKING

The following 5 questions are asked about a proposed decision:

IS THE DECISION STAKEHOLDER INTEREST EXAMINED
1. profitable? Shareholders’–usually short-term
2. legal? Society at large–legally enforceable rights
3. fair? Fairness for all
4. right? Other rights of all
5. going to further Specific rights
sustainable development?
Question 5 is an optional question designed to focus the decision-making
process on a particular issue of relevance to the organization(s) or decision
maker involved.

L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004.
TABLE 5.6
MORAL STANDARDS APPROACH TO ETHICAL DECISION MAKING*
QUESTION OF PROPOSED DECISION
MORAL STANDARD
Utilitarian:
Maximize net benefit to Does the action maximize social benefits
society as a whole and minimize social injuries?
Individual rights:
Respect and protect Is the action consistent with
each person's rights?
Justice:
Will the action lead to a just distribution
Fair distribution of
of benefits and burdens?
benefits and burdens
*All three moral standards must be applied; none is a sufficient test by itself.

L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004.
TABLE 5.7
PASTIN'S APPROACH TO STAKEHOLDER IMPACT ANALYSIS

KEY ASPECT PURPOSE FOR EXAMINATION

Ground rule ethics To illuminate an organization's and/or
an individual's rules and values
End-point ethics To determine the greatest net good
for all concerned
To determine what boundaries a person
Rule ethics or organization should take into account
according to ethical principles
Social contract ethics To determine how to move the boundaries
to remove concerns or conflicts

L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004.