Chapter 12: Codes of Ethics and Corporate Governance – A Study of New Zealand Listed Companies
Trish Keeper INTRODUCTION Corporate ethics and codes of ethics have received a great deal of attention in recent years; years that have been colored by numerous high-profile corporate scandals and changes. These events emphasize that compliance with the law does not guarantee ethical behavior and that ‘moral responsibility in the corporate domain cannot be reduced to obeying the law’ (Kaptein and Wempe 2002, p. 23). As the Enron collapse illustrated ‘[w]hatever law, and whatever kind of law, is put in place for controlling business, it is mined for opportunities for circumvention’ (McBarnet 2006, p. 35). However, while society, and for the most part companies and those who manage them, now accepts that corporations should behave ethically, there continues to be a degree of ambivalence with regard to attributing corporations with ethical responsibilities for wider stakeholder and societal interests (Kaptein and Wempe 2002, p. 39). Primarily, this reluctance flows from a theoretical disagreement as to the nature of a company. Those who advocate that a company’s principal objective is to maximize the return to shareholders contend that it is unethical for a company to consider the rights and interests of any other group (Friedman 1970). On the other side are those who reject this strict profit maximization approach in favor of some wider responsibility. Among proponents of the viewpoint that corporations do have ethical responsibilities beyond share value maximization (either as a normative belief, or under the banner of stakeholder theory or corporate social responsibility), there is, however, a diverse...
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