Corporate Governance and Ethics

Corporate Governance and Ethics

An Aristotelian Perspective

New Horizons in Leadership Studies series

Alejo José G. Sison

Corporate Governance and Ethics is an illuminating and practical reading of Aristotle’s Politics for today’s corporate directors. With a deft synthesis of ethics, economics and politics, Alejo Sison elevates the discussion of corporate governance out of the realm of abstract rules and structures into a more effective form of Aristotelian politics. He argues that corporate governance is a human practice where subjective, ethical conditions outweigh the mastery of techniques, since the firm is not a mere production function but, above all, a community of workers. Corporate governance issues are discussed in a holistic fashion, using international case studies to embed the discussion in environments defined by their economic, legal and cultural systems. One of the author’s key messages is that reform starts with the ethical and political education of directors.

Foreword by Jeffrey Pfeffer

Jeffrey Pfeiffer

Subjects: business and management, business leadership, corporate governance, economics and finance, corporate governance, financial economics and regulation, politics and public policy, leadership

Extract

Foreword There is little evidence that reforms in corporate governance have made any difference. The salaries of chief executives continue to soar in the U.S. and elsewhere as well, even though compensation committees must be independent and even though there is more disclosure of what people earn. Companies are still restating financial results at a prodigious rate and balance sheet and income statement surprises continue, even though accounting standards have presumably been tightened, audit fees have gone up, and CEOs must personally attest to the accuracy of the reports their companies release. And in the workplace, distrust of management and disengagement and diminished job satisfaction persist, resulting in ever higher levels of turnover and, as a result, lower levels of productivity and service – just fly on most airlines to see these facts at close range – even though most observers recognize a coming labour shortage and the importance of intellectual capital for business success in the modern economy. For the most part, we have attacked the symptoms rather than the root cause of the problems. Reforms have been concerned with form instead of substance, with ensuring compliance instead of changing mindsets, with promulgating ‘minimum standards’ rather than with stimulating excellent and thoughtful leadership. The mindset that seems to dominate current discourse all over the world is one that emphasizes ends, achievements and objectives, and plays down the means and processes employed in their attainment. In business and in society more generally, we do not look too hard at the price...