The fiduciary responsibility of directors to preserve intergenerational equity

Majumdar, Arjya B. (2019) The fiduciary responsibility of directors to preserve intergenerational equity. Journal of Business Ethics, 159 (1). pp. 149-160. ISSN 0167-4544

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The well-being of generations yet to come must necessarily be an important concern for the present. As an extension of Rawls’ ‘just savings’ principle, one of the arguments for sustainable development is that of intergenerational equity - the idea that future generations must have the same access to natural resources as the present generation. In this article, I attempt to reconcile the divergent positions of the shareholder and stakeholder primacy debate by proposing that directors- acting for the corporation- should preserve intergenerational equity. Three arguments are presented in course of this proposition. Firstly, corporations are perpetual in nature and their continuing existence is predicated upon the ability of individual owners to transfer their ownership. Second, directors have a higher fiduciary duty to the corporation and future shareholders, over that of present shareholders. Finally, in order to safeguard the interests of future shareholders, corporations must necessarily strive to preserve the natural and social environments upon which the future of the corporation and the wealth of future shareholders depends.

Item Type: Article
Keywords: Business law | Fiduciary duties | Intergenerational equity
Subjects: Social Sciences and humanities > Social Sciences > Law and Legal Studies
JGU School/Centre: Jindal Global Law School
Depositing User: Shilpi Rana
Date Deposited: 17 Dec 2021 06:13
Last Modified: 28 Jul 2023 05:04
Official URL:


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