Themes in Business Ethics

Corporate Governance

Formal systems of accountability, oversight and control constitute corporate governance.  Knowing the principles and practices of sound, responsible corporate governance can be an important deterrent to unethical behavior. Similarly, an understanding of the complex interdependencies between corporate governance and other institutions, such as stock exchanges and regulatory bodies, can be an important factor in managing risk and reputation. In making students aware of the issues surrounding corporate governance, business programs should address topics such as the following:

            - shareholder rights and stakeholder participation level

            - executive compensation, CEO selection and termination processes

            - board of director composition, structure & CEO role in board decisions

            - auditing, control systems and risk management

            - integrity of financial reporting

            - compliance with corporate governance reform

            - organizational ethics programs

(adapted from Business Ethics: Ethical Decision Making and Cases, Ferrell, Fraedrich, and Ferrell “Corporate Governance Issues”-Table 4-1, Houghton Mifflin Co., 2005).

Research on corporate governance in a global environment is an emerging priority. For example, the European Corporate Governance Institute (ECGI) is an international scientific non-profit association that provides a forum for debate and dialogue between academics, legislators and practitioners, focusing on major corporate governance issues and thereby promoting best practice. Their primary role is to undertake and disseminate impartial and objective research on corporate governance and undertake any other activity that will improve understanding and exercise of the highest standards in corporate governance.