Clarkson Visiting Scholar Chris MacDonald recently published this commentary on the connection between corporate governance and ethics: Why You Should Care About Corporate Governance.
The main point of the piece is that corporate governance is fundamentally a matter of ethics, and that, further, governance issues have implications far beyond their impact on the shareholders they are typically thought of as protecting.
…corporate governance isn’t just about laws and regulations, and it’s not a concern just for folks on Bay Street. It is also a matter of ethics, and it should be a matter of concern to the public generally.
Governance is fundamentally about who is responsible to whom, and for what, and under what conditions. At a well-governed company, the actions of employees, and especially those of senior executives, are driven by the values that ought to drive their actions. They are not driven by personal greed, or nepotism, or cronyism. Good governance practices are intended to make it more likely that those who carry out the company’s work will act upon their ethical obligations….
Chris’s bottom line:
And regardless of your perspective on corporate governance, it is impossible to deny that the way decisions get made, and the interests that corporate policies encourage decision-makers to serve, are ethically important matters.
