The question of conflict over what constitutes fiduciary responsibility is an important one… because fiduciary responsibility is the most common argument for taking a short term view of success and for choosing layoffs over other measures. Share price is often both a narrow and a short term the ‘measure’ for determining whether executives have met their responsibility to shareholders. Despite the idea that share price supposedly incorporates assessments/predictions of the organization’s future financial picture, the 13 week evaluation cycle of quarterly earnings can shortchange both the organization and its stakeholders. It’s the goose and the golden egg tradeoff.
But you teach corporate finance, so you know this already.

There is some (legal) arguing out there, in the conversation about B Corporations, that suggests that fiduciary responsibility already includes responsibility to employees and to the organization’s long term health … This argument has been used to downplay the inventiveness (and purported need for) an organizational charter that explicitly includes these in the definition of fiduciary responsibility. Given that the growing number of B Corporations explicitly include employees welfare and public welfare as responsibility of executives, it begs the question– are B Corporations (with their explicitly broader definition of corporate responsibility) responding to the current economic situation differently than organizations with the more traditional charter?

Anyone need a dissertation topic?

When managers go beyond the business case for alternatives to layoffs, they sacrifice shareholder profits for the greater good. For many this proposal is a non-starter because it is inconsistent with managers’ fiduciary duties. But if your post sparked a shareholder movement instructing managers to pursue layoff alternatives, there would be no fiduciary conflict. For some, an important question is one of audience.

2. Every employee who is not laid off is another employee who can continue to pay taxes — the taxes that fund not only the stimulus program and the war in Iraq, but also fund all the other services that we collectively depend upon as as society.