Corporate Directors and Social Responsibility: Ethics versus Shareholder Value

Author: Rose, Jacob

Source: Journal of Business Ethics, Volume 73, Number 3, July 2007 , pp. 319-331(13)

Publisher: Springer

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Abstract:

This paper reports on the results of an experiment conducted with experienced corporate directors. The study findings indicate that directors employ prospective rationality cognition, and they sometimes make decisions that emphasize legal defensibility at the expense of personal ethics and social responsibility. Directors recognize the ethical and social implications of their decisions, but they believe that current corporate law requires them to pursue legal courses of action that maximize shareholder value. The results suggest that additional ethics education will have little influence on the decisions of many business leaders because their decisions are driven by corporate law, rather than personal ethics.

Keywords: board of director; ethics; social responsibility

Document Type: Research article

DOI: http://dx.doi.org/10.1007/s10551-006-9209-z

Affiliations: 1: Email: jakerose@cba.siu.edu

Publication date: 2007-07-01