Theorising the Fiduciary: Ontology and Ethics

Abstract

Despite the omnipresence of the fiduciary in business organisations, there is an omission of theorisations of this legal concept within business ethics literature. This is surprising considering its widespread and embedded use, but even more so given that the presence of ethics within the fiduciary is increasingly contested ground. This article addresses both issues by theorising the fiduciary using an ontological analysis—one which subsequently helps identify a suitable ethical framework. The article argues on two grounds that the ontology of the fiduciary is inherently relational; it renders the fiduciary’s implicit ontology explicit. Firstly, the fiduciary is shown to be process-oriented, indicating an open, emergent, and relational ontology at work. Secondly, historical investigation of the development of the fiduciary highlights its core relationship structure, and the interdependency and power dynamic embedded in the fiduciary are revealed. The argument is advanced that by bringing this inherent relational ontology to the fore, we can see how a relational ethical framework—the Ethics of Care—is best placed to explicate the ethics at work in the fiduciary. The article concludes with a discussion outlining how this ontological theorisation offers utility in steering future practice of the fiduciary.

Fiduciary Activism From Below: Green Gentrification, Pension Finance, and the Possibility of Just Urban Futures

“…Separating "legal" and "beneficial" ownership solved a crucial problem for landowning classes, in that it allowed land assets to remain in the family in the absence of a male heir (women were legally barred from property ownership and inheritance). Contemporary fiduciary responsibilities consist of the duties of prudence, care, and loyalty in the management of the property or assets of others, and each is supposed to be given due weight (Mussell, 2022). The duty of care implies "skill and diligence," meaning that fiduciaries must consider a wide range of potentially relevant factors affecting the value of investments when managing a portfolio.…”

“…Finally, impartiality means that the interests of particular people (e.g., trustees) or groups of beneficiaries (e.g., retirees, young workers) should not be privileged. These duties are enshrined in law, so trustees can be held personally liable; however, they also have deeply moral historical and ontological foundations (Harrington, 2016;Mussell, 2022).…”

“…Environmental factors such as physical damage to infrastructure are more readily assimilated into fiduciary logic than social factors. Understanding humans and their environments as fundamentally and inexorably in relation (Mussell, 2022) with one another poses a more profound challenge for ESG's atomized, calculable, and knowable understanding of the environment.…”