Document Type

Article

Publication Date

2018

Publication Title

Midwest Studies in Philosophy

Volume

42

Issue

1

First Page

156

Last Page

173

DOI

https://doi.org/10.1111/misp.12088

Abstract

According to an existing “environmental” narrative, the financial crisis of 2007-2009 was due in part to executive compensation packages in the financial services industry that incentivized excessive risk-taking. Also according to this narrative, those who have a duty to protect society – principally, government regulators, but also firms themselves – are open to blame for how executives were paid, and must take steps to change executive compensation. This narrative is important but incomplete. I offer a supplementary “agential” narrative. According to this narrative, executives are open to blame for the financial crisis for taking socially excessive risks. Moreover, since executives can play a role in shaping their compensation, they have an obligation to ensure that it does not incentivize them to take such risks.

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