The distinction between what I call nonelective obligations and discretionary obligations, a distinction that focuses on one particular thread of the distinction between perfect and imperfect duties, helps us to identify the obligations that carry over from principals to agents. Clarity on this issue is necessary to identify the moral obligations within “shareholder primacy” (i.e., “shareholder theory”), which conceives of managers as agents of shareholders. My main claim is that the principal-agent relation requires agents to fulfill nonelective obligations, but it does not always require (and sometimes actually prohibits) discharging discretionary obligations. I show that the requirement to fulfill nonelective obligations is more far-reaching than has been acknowledged by most defenders and critics of shareholder primacy. But I also show that managers are not bound by certain discretionary obligations like charity, showing that their moral obligations are more circumscribed than the obligations that apply to human beings in general.

This paper reports an exploratory and qualitative study of the corporate social responsibility (CSR) beliefs of leaders of large Australian financial institutions. The findings are presented in four sections. The first discusses whether leaders have a mental model of the firm that is most closely aligned with the traditional shareholder or the stakeholder view of the firm. It then examines how they frame the organization's responsibilities, particularly as they relate to balancing the needs of shareholders and other stakeholders. The third section identifies how they view CSR and the fulfilment of potential economic, legal, ethical and philanthropic responsibilities of organizations. The final section examines the driving factors that lead to their promotion of corporate social responsibility. We find that although many leaders support the wealth creation model's central premise that the organization's primary responsibility is to maximise its value in order to meet its fiduciary obligations to its shareholders, they also believe that CSR activities benefit the organization financially and in building corporate sustainability, employee engagement and performance, and social capital. CSR activities are also believed to increase the legitimacy of the organization, although philanthropy is not supported unless there is a business case. This has implications for those seeking support from organizations for community causes. We also find the view of employees as primary stakeholders is strong and widespread; an implication of this is that employee influence is a strong lever for positive change towards CSR behaviour in a firm.