Fort's ‘Business as Mediating Institution’—A Holistic View of Corporate Governance and Ethics

• DOI: http://doi.org/10.1111/j.1744-1714.2004.04104005.x
• Date: 01 June 2004
• Published date: 01 June 2004
• Author: Don Mayer

Fort’s ‘Business as Mediating

Institution’FA Holistic View of

Corporate Governance and Ethics

Don Mayer

n

I. INTRODUCTION

During the 1990s, Tim Fort’s work in ethics focused on restructuring

corporations to create and nurture ethical thinking and ethical behavior. At

various academic conferences, particularly at the Academy of Legal Studies

in Business, he presented fresh ideas in clear, seamless prose. So I was

pleased to see his thoughts collected in book form; in reviewing Fort’s

Ethics and Governance: Business as Mediating Institution, I find much in the

book worthy of praise, but balance my enthusiasm with several critical

caveats.

Ethics and Governance is published as part of the Ruffin Series in Busi-

ness Ethics, which includes titles by Pat Werhane, Bill Frederick, Ed Free-

man, Richard Nielsen, Bob Solomon, Tom Donaldson, and Ed Hartman.

Good writing about ethics dates back at least to the Athenians, so it is dif-

ficult to contribute anything new. Yet Fort does make some striking and

original pointsFpoints well worth considering by managers, business eth-

icists, and those who ponder legislative or regulatory changes to corporate

governance.

His approach is engagingly holistic; any single chapter is apt to con-

tain references to anthropologists, political theorists, theologians, biolo-

gists, evolutionary psychologists, sociologists, and philosophers. Ethics and

Governance cannot be categorized as a book on law or as a book on ethics; it

is both, and is best understood as an extended argument for restructuring

corporations to better resonate with the complex ways that human beings

live with and learn from one another.

595

American Business Law Journal

Volume 41, Issue 4, 595–619, Summer 2004

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Professor of Management, Oakland University, Rochester, Michigan.

This review first provides a short summary of Ethics and Governance,

followed by a more detailed summary. It then raises questions about the

effectiveness of ‘‘business as mediating institution’’ in corporate govern-

ance.

II. ETHICS AND GOVERNANCE:THE EXECUTIVE

SUMMARY

The book is divided into three parts. The first sets forth the idea of busi-

ness as mediating institution (BMI): a place where values are created,

aligned, communicated, and experienced in ‘‘community’’ with others.

1

The second part relates BMI to other business ethics frameworksFstake-

holder theory, social contracts, and communitarianism.

2

The third partF

titled ‘‘Theology and Business’’Faims to remind readers that some kind

of transcendence must guide and inspire individuals and communities that

pursue ethical excellence.

3

At the risk of oversimplification, the executive summary of Ethics and

Governance follows:

‘‘Ethics’’ means what we do when we think beyond immediate self-

interest; ideally, ethics involves inspired and creative compassion for

others.

For thousands of years, families and small groups such as tribes, guilds,

and voluntary associations have created and maintained ethics and

values. These groups ‘‘mediate’’ conflicts between the individual and

society.

Any realistic approach to corporate ethics must take seriously the need

for and potency of such mediating institutions.

Corporations can become too large and impersonal to practice and

learn ethics and values. Corporations need to create places and spaces

where people are empowered to voice their values in community with

one another, to provide positive and negative feedback about the ac-

tions of others, and thus create shared values within that community.

1

TIMOTHY L. FORT,ETHICS AND GOVERNANCE:BUSINESS AS MEDIATING INSTITUTION (2001), Part I,

at 1–116.

2

Id. at 117–78.

3

Id. at 179–230.

596 Vol. 41 / American Business Law Journal