Business Governance and Ethics - Practitioner - Ethics, Corporations, and Governance

Wesley Cragg and Dirk Matten, “Ethics,Corporations, and Governance”, Journey of Business Ethics; Aug 2011, Vol. 102, p1-4, Business Source Complete. Web. 8 July 8, 2012.

Since 1932, the question of how to run a consumer preference business has been introduced and studied. So far, more and more scholars and business practitioners have focused on the topic of business governance and ethics.

By studying the corporate role in wider society governance, this article has a full analysis about corporate governance. There are six themes highlighted in this article to debate the integration of governance at corporate and societal level. The first one is questions about shareholder supremacy.  

In the corporate governance model, every shareholder has the right to be informed as to how the company performs their investment. The second debate in the article is “Responsible to Whom?” The authors take the subprime mortgage crisis as an example that the exploitation of market imperfections has been exposed leading to destructive effect to credit markets in the US and even the entire world. The third debate is “Board Composition and Responsibilities”. The current ethical responsibilities of boards could be extended to include distinct strategic management responsibilities regarding to those potential business activities that negatively influence individuals and wider society. The forth debate is about “Regulation: A Red Flag?” Experts are confused about with the problem that whether the weak regulatory oversight and deregulation lead to the contemporary capitalism. The fifth theme is “Performance for Whom?” which is about the discussion that corporate social performance affects financial outcomes for business firms. The last debate in this article is “Who then are the Stakeholders?” Shareholders have the right to know “the company'sacquisition of other businesses, sales of large shares of stock, mergers withother corporations and proposed changes to the board of directors”.

However, At first glance, the authors didn’t give any implications to the practicing managers in this article. But after reading the six scholarly contributions in the special issue, practicing managers could learn how to reform as more ethical and responsible corporate governance and are encouraged to work and perform a closer integration of governance at corporate and societal level.