Equator Principles: Bridging the Gap between Economics and Ethics?

The hypothetical conflict between self‐interest, corporate interest, and the common good is one of the hottest debated issues in business ethics. This article focuses on a particular corporate social responsibility approach within the field of sustainable (project) finance, which has the potential—given that certain reform measures are adopted—to overcome the alleged trade‐off between self‐interest and the common good. The approach is labeled as the Equator Principles (EPs) framework, which celebrated its tenth anniversary and the formal launch of the third generation of the EPs (EP III) in 2013. The article shows how companies can theoretically be both profitable and socio‐environmentally responsible by adhering to the EPs. The article proceeds as follows: Before moving on to the EPs, section 2 defines the key terms self‐interest and common good. Section 3 then analyzes the EPs from a business ethics perspective. Section 4 shows how the EPs can help in solving the potential trade‐off between self‐interest and the common good—provided that the EPs are substantially revised. These required reform steps are discussed in section 5. The article ends with a summary of the main findings.     

Institutional Predictors of and Complements to Industry Self‐regulation with Regard to Labor Practices

In recent years, there has been increasing managerial and academic attention given to a variety of mechanisms for companies to respond to stakeholder concerns about global business ethics. One area that merits further analysis is the role of industry‐level cooperation regarding issues in global business ethics such as labor practices. There are two main issues that we will address in this article: institutional pressures that predict when an industry will create a code of conduct and institutional complements for an industry‐level code of conduct to be “successful” with regard to responding to stakeholder concerns about international business operations. We offer a number of propositions—bringing together work from both the corporate social responsibility and (neo)institutional theory literatures—with regard to both predictors and complements of industry self‐regulation in reference to labor practices.     

A Corporate Culture Pattern to Manage Business Ethics

Within the general frame of proposals for an adequate management of business ethics, this paper is based on the vision of corporate culture as a pattern to achieve such purpose. If we consider ethics as a specific value of corporate culture, we may resort to the mechanism of cultural change and implementation in order to manage ethics. Despite the difficulties it entails in terms of time and money investment, this procedure is one of the safest ways to reach ethical values which are known, shared and then practiced by all the members of a corporation, whatever the category. From this central standpoint, and basing ourselves on our own proposal for the management of culture, we shall describe which specific steps must be taken in order to achieve a set of ethical values which are both realistic and furthermore shared by all collaborators of an organization.     

A Corporate Culture Pattern to Manage Business Ethics

Within the general frame of proposals for an adequate management of business ethics, this paper is based on the vision of corporate culture as a pattern to achieve such purpose. If we consider ethics as a specific value of corporate culture, we may resort to the mechanism of cultural change and implementation in order to manage ethics. Despite the difficulties it entails in terms of time and money investment, this procedure is one of the safest ways to reach ethical values which are known, shared and then practiced by all the members of a corporation, whatever the category. From this central standpoint, and basing ourselves on our own proposal for the management of culture, we shall describe which specific steps must be taken in order to achieve a set of ethical values which are both realistic and furthermore shared by all collaborators of an organization. This revised version was published online in July 2006 with corrections to the Cover Date.     

Sustaining the Financial Value of Global CSR: Reconciling Corporate and Stakeholder Interests in a Less Regulated Environment

In this article we examine the association between corporate social responsibility (CSR) and firm value. This line of research is important since firms continue to invest in CSR even though past studies reveal a limited linkage between financial value and CSR. However, the business case for CSR or “doing good while making a profit,” appears to be advancing within the business ethics literature as a preferred conception of CSR. We conjecture that the greater unification and refinement of both profit maximization and stakeholder interests through corporate acts, not statements alone, will sustain the financial value of CSR in a less regulated global business environment. We study the triangle of what companies say, what companies do, and firm financial performance. We analyze Fortune 250 firms and find a positive association between what companies do based on KLD Research and Analytics, Inc. (KLD) ratings, and what companies state about ethics in their CSR statements. We then employ regression analysis and find that companies’ socially responsible acts are positively associated with overall firm value and financial performance. Yet we do not find a statistically significant association between what companies say regarding ethics in their CSR statements and their financial outcomes. These results suggest that firm value and financial performance is associated with what companies do and not what they say. Our results seem to be driven by multinational corporations (MNCs) and not by non‐MNCs. This is possibly because MNCs generally operate in a less regulated global business environment that often necessitates strong ethical corporate leadership to further stakeholder interests. Overall, these results help reconcile corporate and stakeholder objectives since evidence of a link between financial performance and doing good sustains global CSR.     

Codes of Ethics: What Are They Really and What Should They Be?

Codes of ethics are prevalent in major corporations around the world. They are seen as the first tangible commitment to being ethical. This paper examines codes of ethics and tries to establish what they are, how they are developed and their net utility. We then proffer the idea of codes as the first part of a five-stage process that leads to an overall corporate commitment to being ethical in one's business dealings.     

A Thin Spot1

A “thin spot” in thinking about business endangers our human being. This article traces a change in business thinking over the last generations to note how, under the spell of the scientific method and the thrall to utilitarian values, our understanding of our self has grown harder, more determined, and less sympathetic. Bringing together ideas about the meaning of self from the study of semiotics and from the author's own religious faith, this article describes how we can reclaim our human being by grounding thinking about business in faith that reaches to God.     

Corporate Ethics Codes: A New Generations' Tool for Strategic Global Management and Decision-Making

The premise of this article is that it is important to train domestic and international executives in management ethics using corporate ethics codes. Incorporating ethics codes into the professional development of executives in business and industry contributes to the institutionalization of codes in the global workplace. Ethics institutionalization imbues corporate structures with understanding, both internally and externally, of the concepts of ethics. At an east coast University School of Management a Comparative Code Method (CCM) was developed and tested. Among the major findings, was that the use of corporate codes quickly transitions employees from an individual ethical perspective to a corporate ethical perspective. This revised version was published online in August 2006 with corrections to the Cover Date.     

针对灰色营销进行道德培训的实验效果

本文以道德培训为操纵变量,以工商管理专业的大学生为实验对象,研究了灰色营销的道德培训对人们灰色营销道德判断和行为倾向的影响.结果发现:第一,针对灰色营销的短期道德培训能够显著改进被培训者针对灰色营销的道义论评价和目的论评价,但是不能降低其灰色营销行为倾向;第二,尽管针对灰色营销的短期道德培训能够改进人们针对灰色营销的道义论评价和目的论评价,并且后者对人们的灰色营销行为倾向也有显著影响,但是它们不能中介短期道德培训对灰色营销行为倾向的影响.本文最后讨论了研究结果的理论贡献与实际应用.     

Taking (and Sharing Power): How Boards of Directors Can Bring About Greater Fairness for Dependent Stakeholders

One of the ways in which scholars have sought to broaden the discussion of the social responsibilities of corporations and their managers is through the development of the stakeholder concept. The primacy of shareholder interests in corporate‐governance processes and managerial action is, however, a myth that justifies all sorts of managerial self‐interest seeking and exploitation of particular stakeholder groups. What makes this myth particularly problematic—from the standpoint of fairness and corporate governance—is that not all nonshareholder stakeholders are equally situated with regard to their ability to secure fair treatment. In this article, I explore the ethical dimensions of board responsibilities to dependent stakeholder groups by first describing the differences between shareholders and nonshareholder stakeholders with regard to risk, examining why dependent stakeholders (stakeholders with legitimate and urgent claims, but no power) are particularly important from the standpoint of stakeholder risk, and discussing how stakeholder consultation might provide a partial fix to such problems. I will conclude with proposals for how boards can more faithfully discharge their ethical responsibilities to dependent stakeholder groups, and in so doing facilitate stakeholder involvement in corporate governance in ways that promote fairness in organization–stakeholder relationships.     

Health‐care Nonprofits: Enhancing Governance and Public Trust

Nonprofits are a major part of the U.S. economy and they are not immune from corporate malfeasance controversies. Even Congress has expressed concern about the crisis in nonprofit governance. The nonprofit response to Congress has been a historic initiative recognizing critical challenges to nonprofit governance. In contrast to their for‐profit counterparts, nonprofits are committed to missions serving the public benefit and not to shareholder profits. Accordingly, their missions and financial resources are intrinsic to their very existence, which is built upon the public trust. That trust is rooted in fiduciary responsibility and reflected in best practices. This article traces the history of the nonprofit public trust and fiduciary standards and examines principles of Sarbanes–Oxley and other best practices as they apply to nonprofits. The authors sampled 80 health‐care nonprofit corporation web sites from eight asset classes to determine compliance with Sarbanes–Oxley and identification of fiduciary duty, ethical values, and other best practices. Among the very largest health‐care nonprofits, many comply with Sarbanes–Oxley and identify fiduciary duty, ethical values, and other best practices. However, there are substantial deficiencies in such compliance and identification among all remaining seven asset classes ranging from 99.9 million to less than 100,000. The results appear to corroborate the urgent necessity for reform articulated by the Congress and the nonprofit sector. Nonprofit governance has entered a new era where best practices must be implemented to sustain the public trust.     

Operational Best Practices in Business Ethics: A Practical and Systematic Benchmarking Tool

This article describes a benchmarking tool managers can use to determine operational policies and processes that could enhance an organization's social and ethical performance. The benchmarking tool consists of a 13‐dimension, 110‐item survey based on an Optimal Ethics Systems Model. These best practices in business ethics are derived from an analysis and assessment of seven institutional infrastructures and accountability standards developed to help managers improve organizational social and ethical performance.     

Emerging paradoxes in executive leadership: A theoretical interpretation of the tensions between corruption and virtuous values

The recent mini scandal surrounding questionable on-line postings of John Mackey, the founder and CEO of Whole Foods Market Inc., raises once again ethical challenges related to contemporary business leadership. Given his visible commitment to environmentally sound strategies and other responsible business practices, Mackey’s actions epitomize the irony and paradox that can surround executive leadership ethics. While this essay acknowledges the potential role of stricter legal constraints, punishments for offenders, decentralized governance systems, and rationalized structures that help prohibit power abuse, it views such rationalistic considerations alone to be inadequate. Rather, the authors suggest that the promotion of authentic virtuousness is an often overlooked yet indispensable part of any meaningful long term ethical leadership process.     

Stakeholder Theory: The State of the Art

Abstract

For the last 30 years a growing number of scholars and practitioners have been experimenting with concepts and models that facilitate our understanding of the complexities of today’s business challenges. Among these, “stakeholder theory” or “stakeholder thinking” has emerged as a new narrative to understand and remedy three interconnected business problems—the problem of understanding how value is created and traded, the problem of connecting ethics and capitalism, and the problem of helping managers think about management such that the first two problems are addressed. In this article, we review the major uses and adaptations of stakeholder theory across a broad array of disciplines such as business ethics, corporate strategy, finance, accounting, management, and marketing. We also evaluate and suggest future directions in which research on stakeholder theory can continue to provide useful insights into the practice of sustainable and ethical value creation.     

Religious Social Identities in the Hybrid Self‐presentations of Sikh Businesspeople

This paper explores the identity work practices of Thai Sikh businesspeople. The paper focuses on two important social identities in participants’ self‐presentations – those derived from religious (Sikh) and western business discourses – and identifies powerful tensions in their hybrid identity work. Conducting discourse analysis on identity work practices within interview settings, the authors explore how participants resolve, accommodate or reject these discursive tensions while attempting stable and coherent hybrid self‐presentations. They identify several different forms of hybridity, including what they term ‘equipollence’, which occurs when two equally powerful, contradictory discourses are incorporated in self‐presentations, producing potentially irresolvable intersections and leading to a lack of coherence. Contributions are made to the literatures on religion and work, hybrid identity work processes and social identities.     

Management and Business Ethics: A Critique and Integration of Ethical Decision-making Models

This paper critically reviews the literature relating to the management of ethics within organizations and identifies, in line with other authors, a gap between theory and practice in the area. It highlights the role of management (both as an academic discipline and from a practitioner perspective) in bridging this gap and views managers, with their sense of individual ethical agency, as a key locus of ethics within organizations. The paper aims to address the theory–practice gap by surveying the business ethics literature in order to identify, draw together and integrate existing theory and research, with a particular emphasis upon models of ethical decision-making and their relationship to work values. Such an endeavour is necessary, not only because of the relative neglect of management practice by business ethics researchers, but also because of the current lack of integration in the field of business ethics itself. The paper outlines some of the main methodological challenges in the area and suggests how some of these may be overcome. Finally, it concludes with a number of suggestions as to how the theory–practice gap can be addressed through the development of a research agenda, based upon the previous work reviewed.     

Do Business Leaders Have Role‐Model Obligations to Be Good Political Actors?

This article raises an issue about corporate political activity that is different from those typically addressed by business ethicists. It examines the role‐model status and obligations of the business leaders who direct such activity. This approach has two potential benefits. First, since ethicists often appeal to role‐model obligations and many are concerned about corporate political activity, business ethics literature would benefit from expanding the examination of role‐model status and obligations to encompass the business leaders who direct political activity. Second, it will help ethicists determine what we should demand from business leaders who direct such activity. This is important given the U.S. Supreme Court's Citizens United decision in 2010 that guarantees corporations the free‐speech right to make political expenditures in support of political causes. I seek to demonstrate that we should hold business leaders morally accountable for how they direct political activity because of their role‐model status that arises from their greater fame, authority, or power than ordinary persons possess.     

International Evidence on the Determinants of Organizational Ethical Vulnerability

This paper proposes a model to explain what makes organizations ethically vulnerable. Drawing upon legitimacy, institutional, agency and individual moral reasoning theories we consider three sets of explanatory factors and examine their association with organizational ethical vulnerability. The three sets comprise external institutional context, internal corporate governance mechanisms and organizational ethical infrastructure. We combine these three sets of factors and develop an analytical framework for classifying ethical issues and propose a new model of organizational ethical vulnerability. We test our model on a sample of 253 firms that were involved in ethical misconduct and compare them with a matched sample of the same number of firms from 28 different countries. The results suggest that weak regulatory environment and internal corporate governance, combined with profitability warnings or losses in the preceding year, increase organizational ethical vulnerability. We find counterintuitive evidence suggesting that firms’ involvement in bribery and corruption prevention training programmes is positively associated with the likelihood of ethical vulnerability. By synthesizing insights about individual and corporate behaviour from multiple theories, this study extends existing analytical literature on business ethics. Our findings have implications for firms’ external regulatory settings, corporate governance mechanisms and organizational ethical infrastructure.