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Business Ethics
Law
Legal Standard
Ethics
Social Standard
Free
Choice
Personal Standard
A personal responsibility?
Ethical Dilemma
What would you do?
Governance Issues
Board of Directors Roles & Responsibilities
Control & oversight over management
Adherence to legal prescriptions
Consideration of stakeholder interests
Advancement of stockholder rights
Is being ethical good for business?
Is it possible to be both profitable and responsible?
Corporate Governance
Definitions
Corporate Governance
The Growth of Modern Corporations
The Agency Problem
The agency problem arises because of the
separation between ownership of an
organization and its control
The agency problem is inherent in the
relationship between the providers of
capital, referred to as the principal, and
those who employ that capital, referred to
as the agent.
Corporate Governance
(Jensen & Meckling 1976)
Socially obligative
Prioritising longer-term shareholder interests
Comply with laws
Socially responsive
Balancing multiple stakeholder obligations
Pay attention to pressure groups, use CSR to build competitive
advantage
Socially contributive
Seeking to shape society
Promoting sustainability and locally led economic development
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