Corporate Governance and Business Ethics

EUGENE FAMA and Michael Jensen's treatment of the "Separation of Ownership and Control" is both insightful and informative. It deepens our understanding of corporate control, and the analysis of residual claimants usefully extends the economics of internal organization to include partnerships, mutuals, nonprofits, and the like. The basic argument is this: specialized governance structures arise in response to the efficiency needs of each type of organization. This is an important argument and one with which I broadly concur. They couple this, however, with a strong suggestion that these structures have reached a high degree of refinement-on which account there is not now, if indeed there ever has been, an organization control problem with which scholars and others are legitimately concerned. On this point I have grave doubts. My discussion of the paper addresses three issues: What is the relation, if any, of the hierarchical organization of the firm to economic performance? What relation, if any, does residual claimant status have to the composition and character of the board of directors? And is there now or has there ever been a corporate control problem? I deal with each of these issues in order.

The relationship between corporate governance and business ethics has always been ambiguous. Does corporate governance per definition have an ethical nature or is it merely self-interested? Is business ethics an integral part of corporate governance or is it marginalised or even excluded by the debate on corporate governance? Does corporate governance also include the governance of ethics? This article will focus on the relationship between corporate governance and business ethics from the perspective of a developing country. More specifically, it will look at a recent development in South Africa where the Second Report on Corporate Governance for South Africa (IOD, 2002), also known as the Second King Report, gave particular prominence to business ethics. The motivation for its emphasis on business ethics as well as its guidelines for the corporate governance of ethics will be explored and, in conclusion, critically reviewed.

Editorial – Toward a Global Theory of Corporate Governance

Business Ethics, Social Responsibility and Corporate Governance: Does the Strategic Management Field Really Care about these Concepts?

Purpose Using the global financial crisis as a critical event and based on institutional theory and stakeholder theory, this paper aims to explore the relationship between corporate governance and corporate social responsibility (CSR). The question is how stakeholders can influence corporate responses to societal change by using their position in the governance structure. Design/methodology/approach The analysis is based on a historical analysis of data collected mainly between 2002 and 2004. The historical perspective enables an understanding of the response of the company to environmental changes. Findings The approach enables researchers to relate the normative component of CSR to specific governance mechanisms. These governance mechanisms are specified in direct and indirect influence pathways. Historical data shed light on how, in the upbeat of the crisis, stakeholders have influenced the principles and policies of the ING Group, a Dutch financial company. Research limitations/implications The paper suggests that stakeholders influence principles – normative assumptions that guide corporate decisions – mainly in dialogue-based meetings (direct influence pathways). Companies are made accountable in indirect influence pathways such as regulations. The author also demonstrates that a historical approach enables an understanding of long-term historical developments and the linking of corporate policies to the normative assumptions of stakeholders. Practical implications If stakeholders wish to assess the social responsibility of a company, then they should assess the governance structure in relation to the principles and policies. The power structure within a company and that within the institutional framework in which the company operates (the governance system) strongly influences how a company executes its social responsibilities. Social implications The paper demonstrates how stakeholders can use the governance structure to influence a bank. If society – or a specific group in society – wants banks to play a different role, this paper points to what could be the levers of change in the governance system and the governance structure. Originality/value Insights into the complex relationship between corporate governance and the processes in which the social responsibilities of a company are developed.

[Extract] Where is business ethics today? And with this, where are business ethics today? Where do we find them? Are there enough? These questions strike us today, and present us with our starting points. First of all in considering how business ethics has evolved, and what state it is in. But also, in asking where business and ethics are today and how and where they might be in the future. Starting out with these seemingly innocent questions, we face a set of somewhat more troubling questions about the location of business ethics. For some, business ethics is quite easy to locate. When seen as a business function, an academic discipline or a part of business school education, business ethics is often taken as something that obviously has a location. If business ethics is readily locatable, then it can be disciplined, generalised, taught and instituted as part of best practice and corporate strategy. But are business ethics so easily locatable? Are they a 'something' characterised by a 'thingliness' that might allow them to be taken in hand and put to use? If business ethics are not open to such reification, then we might find that ethics in business involves a basic dislocation relating to phenomenal experiences arising when things are out of place. Business ethics would then take place when, as was sensed by Hamlet, things are 'out of joint'. The experience of whistleblowers and the victims of corporate malfeasance is certainly one of deeply felt dislocation. If we find business ethics in these practices, might ethics also be found in other spaces of dislocation?

To commemorate 40 years since the founding of the Journal of Business Ethics, the editors in chief of the journal have invited the editors to provide commentaries on the future of business ethics. This essay comprises a selection of commentaries aimed at creating dialogue around the theme Ethics at the centre of global and local challenges. For much of the history of the Journal of Business Ethics, ethics was seen within the academy as a peripheral aspect of business. However, in recent years, the stakes have risen dramatically, with global and local worlds destabilized by financial crisis, climate change, internet technologies and artificial intelligence, and global health crises. The authors of these commentaries address these grand challenges by placing business ethics at their centre. What if all grand challenges were framed as grand ethical challenges? Tanusree Jain, Arno Kourula and Suhaib Riaz posit that an ethical lens allows for a humble response, in which those with greater capacity take greater responsibility but remain inclusive and cognizant of different voices and experiences. Focussing on business ethics in connection to the grand(est) challenge of environmental emergencies, Steffen Böhm introduces the deceptively simple yet radical position that business is nature, and nature is business. His quick but profound side-step from arguments against human–nature dualism to an ontological undoing of the business–nature dichotomy should have all business ethics scholars rethinking their “business and society” assumptions. Also, singularly concerned with the climate emergency, Boudewijn de Bruin posits a scenario where, 40 years from now, our field will be evaluated by its ability to have helped humanity emerge from this emergency. He contends that Milieudefensie (Friends of the Earth) v. Royal Dutch Shell illustrates how human rights take centre stage in climate change litigation, and how business ethics enters the courtroom. From a consumer ethics perspective, Deirdre Shaw, Michal Carrington and Louise Hassan argue that ecologically sustainable and socially just marketplace systems demand cultural change, a reconsideration of future interpretations of “consumer society”, a challenge to the dominant “growth logic” and stimulation of alternative ways to address our consumption needs. Still concerned with global issues, but turning attention to social inequalities, Nelarine Cornelius links the capability approach (CA) to global and corporate governance, arguing that CA will continue to lie at the foundation of human development policy, and, increasingly, CSR and corporate governance. Continuing debate on the grand challenges associated with justice and equality, Laurence Romani identifies a significant shift in the centrality of business ethics in debates on managing (cultural) differences, positing that dialogue between diversity management and international management can ground future debate in business ethics. Finally, the essay concludes with a commentary by Charlotte Karam and Michelle Greenwood on the possibilities of feminist-inspired theories, methods, and positionality for many spheres of business ethics, not least stakeholder theory, to broaden and deepen its capacity for nuance, responsiveness, and transformation. In the words of our commentators, grand challenges must be addressed urgently, and the Journal of Business Ethics should be at the forefront of tackling them.

Grounded on a multi-theoretic approach, the purpose of this study was to investigate and examine the role and performance of board of directors in corporate governance in Cameroon. The study was motivated by the absence of rigorous corporate governance studies aimed at understanding the role of boards in an African context. The study adopted an exploratory research design in which data was collected through questionnaire survey and analysed quantitative. A qualitative follow up on the quantitative findings to provide a robust explanation was conducted. The findings suggest that, boards in Cameroon perform multiple roles as identified-by the various theories of corporate governance. However, board resource or networking was highlighted to be the most important role boards in Cameroon are committed to perform. This was followed by strategic control, behavioural control, strategic participation, output control, and stakeholder task respectively. Results pointed to the fact that, board roles depending on how it is executed does affect performance of firms. Boards that perform various roles have a positive effect on firm performance while boards that are majority shareholder oriented have a negative effect on the firm’s performance. It also emerged that corporate governance is perceived differently within various industries in Cameroon. Findings also suggest CG practices in Cameroon are very much nascent. The study recommends that corporate governance in Cameroon should be made very visible by implementing separate corporate governance impetus geared at ensuring accountability and transparency in the way firms operate. It also recommends the protection of minority shareholders in firms where there exists concentrated ownership. Finally the study recommends owners of firms to hire directors who understand risk so that; while they control management, they can effectively and efficiently contribute towards firm’s strategy and direction to enhance firm performance.

Three Models of Corporate Social Responsibility: Interrelationships between Theory, Research, and Practice

An Overview of German Business or Enterprise Law and the One-Tier and Two-Tier Board Systems Contrasted.- An Overview of the Corporate Governance Debate in Germany.- The General Meeting and the Management Board as Company Organs.- The Supervisory Board as Company Organ.- The German System of Supervisory Codetermination by Employees.- The Impact of European Development on German Codetermination and German Corporate Law.- Accounting as the Documentary Proof of Good Corporate Governance.- Banking on Trust: The German Financial Sector, Global Capital Markets and Corporate Finance and Governance.- Corporate Governance and Corporate Compliance.- Corporate Governance in the EU, the OECD Principles of Corporate Governance and Corporate Governance in Selected Other Jurisdictions.- European and German Provisions in English for Purposes of Chapter 7.

Contents: Overview, GA ler Aras and David Crowther Part I Theoretical Overview: A Luhmannian in the playground a corporate social responsibility from a systems-theoretic perspective, Juliane Riese What is 'good' corporate governance?, Dominique Bessaire, CA(c)line Chatelin and StA(c)phane OnnA(c)e Redefining sustainability, GA ler Aras and David Crowther The social contract of business in society, Sandra Waddock The shifting meaning of sustainability, Mary A. Kaidonis, Natalie P. Stoianoff and Jane Andrew Corporate social responsibility and accounting, Stuart Cooper Responsible practices in small and medium enterprises, Antonio Vives. Part II Applying Corporate Governance: Trends in corporate governance, Wallace N. Davidson III, Sameh Sakr and Hongxia Wang Corporate governance a responsibilities of the board, Maria Aluchna Shareholder rights and stakeholder rights in corporate governance, Mirella Damiani The regulatory and legal framework of corporate governance, Hillary Shaw The agency problem and corporate governance, GA ler Aras and David Crowther Auditing, product certification and corporate social responsibility, Charles Elad Decisive risk management for corporate governance, Kurtay Ogunc Corporate social responsibility - a broader view of corporate governance, GA ler Aras and David Crowther. Part III Applying Corporate Social Responsibility: The social responsibility of major shareholders, Marc Goergen and Luc Renneboog External agencies and corporate social responsibility, David Birch How globalization is affecting corporate social responsibility a dynamics of the interaction between corporate social responsibility and globalization, A-zer Ertuna and Bengi Ertuna Responsibility and performance - social actions of firms in a transitional society, Deniz Erden and Muzaffer Bodur Feasibility of corporate social responsibility activities practised by SMEs in Uzbekistan a a stakeholders' perspective, Bokhodir Ayupov and Iroda Komilova Education for ethics and socially responsible behaviour, Kumba Jallow Socially responsible investment funds, Luc Renneboog, Jenke Ter Horst and Chendi Zhang Corporate reporting frameworks, Antonio Tencati Corporate reputation and corporate social responsibility, Stephen J. Brammer and Stephen Pavelin Corporate social responsibility rating, Henry SchAfer. Part IV Dealing with Stakeholders: Business and environmental responsibility, Ian Worthington Corporate social responsibility in the creation of shareholder value, Stephan Heblich Employer duties, Stella Vettori Whistleblowing a perennial issues and ethical risks, Wim Vandekerckhove Framing the social responsibility of business a the role of pressure groups a paradigmatic feuds, Aulvaro de Regil Castilla Corporate environmental responsibility from the perspective of systematic and dialectical science, Wang Hong and Wang Xiaoli Why people do good a promoting responsible behaviours a the myth or reality of persuasion in fundraising letters, Cubie Lau. Part V Experience in Practice: Royal Ahold a the role of corporate governance, Abe de Jong, Douglas V. DeJong, Gerard Mertens and Peter Rosenboom Embedding corporate social responsibility into the day-to-day life of organisations a a practical system thinking approach, Rob Peddle, Ian Rosam and Pavel Castka Istiqbol Dilnoza a a corporate social responsibility study of a micro/small business in Tashkent, Rowan E. Wagner Lessons learned from Washington State's sustainable business program, Kimberly Goetz Esh added value a a case study in indigenous corporate social responsibility, Riham Rizk and Suzanne Gregory A case study on the tobacco industry, social responsibility and regulation, Julia J.A. Shaw. Index.

Background and Aims: Enhanced investor scrutiny, regulatory obligations, consumer lobbying, and the obvious effects of social injustice and climate change have all significantly enhanced the relevance of environmental and social responsibility in business. Ethical consumption, environmental principles, and ESG investing have all worked together to transform how businesses operate and engage with the public. In addition to evaluating theoretical frameworks like stakeholder theory, CSR, and ESG. Thus, this paper aims to consolidate existing knowledge, highlight trends, and identify research gaps in Ethical Edge. Methodology: A qualitative documentary research technique was used to investigate company reports, case studies, regulatory frameworks, and peer-reviewed academic literature for themes. The UN SDGs, the Harvard Business Review, the IPCC, and publications from top ESG assessment organizations are examples of core sources. Results: The findings demonstrate the growing significance of supply chain ethics and DEI, the positive correlation between ethical leadership and business resilience, and the strategic importance of environmental responsibility in sectors such as technology, fashion, and the automotive sector. ESG-aligned companies generally do better than their counterparts in terms of market value, client loyalty, and talent retention. However, there is still criticism of worldwide enforcement disparities, conflicting ESG standards, and greenwashing. Conclusion: Ethical and sustainable business practices are no longer optional; they are now crucial to long-term viability and stakeholder trust. The future of business depends on integrated solutions that take social justice, environmental responsibility, and ethical governance into account. Continuous innovation, technology integration, and critical research are essential to advancing this shifting paradigm.

This article contributes both quantitatively and qualitatively to the discussion on implementation of business ethics, as a basic background of social responsibility leading to systemic behaviour. In the frame of business ethics the ethical core values, culture, ethical climate, informal, and formal measures of business ethics implementation is addressed. The article is also aimed to improve understanding of importance of (ethical) corporate governance, key stakeholders’ influence on the enterprise’s core values, culture, the ethical climate, and informal and formal measures of business ethics implementation as the constitutional elements of enterprise ethical behaviour. The article briefs important cognitions of various empirical researches on business ethics in the case of Slovenian enterprises. The business ethics strongly relates to, and matters in, achieving more enterprises’ social responsibility and humankind’s well-being.

Corporate governance is the current exhortation in India as well as the world over. As an offshoot of economic liberalization, global investment in the form of foreign direct investment and foreign institutional investment
 have gained momentum leading to vast economic growth in India. On the other hand, major corporate scams that have occurred worldwide in recent times, have revealed that the need for strict supervision and scrutiny over
 corporate management and governance is a sin quo non for the protection of stakeholders and the growth of the nation which has to compete with the multinational companies in the global arena. 
 
 Further, in India, most of the listed companies, and substantially all billion-dollar companies, are family-run. A particular characteristic of the Indian corporate landscape, however, is a tendency for individuals (and their families) to establish large interlocking networks of subsidiaries and sister companies that include partially owned, publicly listed companies. Such pyramidal structures can lead to severely inequitable treatment of shareholders. The extent of this control is frequently opaque to outsiders and undisclosed by insiders. A particular need for effective corporate governance in India is, therefore, to encourage the dynamism and
 growth of family. The inclusion of Clause 49 by Securities Exchange Board
 of India (SEBI) in the listing agreement between companies endeavouring to have their securities listed in stock exchanges has impacted the modality of corporate management.
 
 This research paper examines the impact of clause 49 of listing agreement of SEBI on corporate governance.

Now in its fourth edition, Principles of Contemporary Corporate Governance offers comprehensive coverage of the key topics and emerging themes in private sector corporate governance. It explains both the principles of corporate governance systems and their real-world application in an authoritative and engaging manner. This fully revised and updated text has four parts: basic concepts, board structures and company officers; corporate governance in Australia; corporate governance in international and global contexts; and shareholder activism and business ethics. The coverage of international contexts includes sections on the US, the UK, Canada, South Africa, the EU, the OECD, Germany, Japan, China and Indonesia, plus new sections on New Zealand and India. A new chapter on business ethics and corporate governance presents contemporary discussions on the topic and explores some of the broader legal issues. Principles of Contemporary Corporate Governance is an indispensable resource for business and law students, academic researchers and practitioners