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.

Chapter 7: Corporate Polities and Corporate Democracies

Alejo José G. Sison

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


At present there is a wide consensus on liberal democracies as the most desirable among all different political regimes. These are characterized by a commitment to liberal values, above all, to the rule of law, and the regular holding of free and fair elections among the members of the citizenry. Despite their limitations, liberal democracies are considered to come closest to the ideal of self-rule, through the wide participation of citizens in a government legitimized by their choice and consent. Within the realm of business and the economy, one finds an increasing demand for a corporate democracy to complement the political democracy of states (Gates, 1998). It is believed that giving employees an ownership stake would enhance their motivation and commitment to the firms in which they work, inexorably leading to improved corporate performance. Employee ownership and participation in the governance of companies would defuse many instances of labour–management conflict. It would also broaden the distribution of wealth (a lot more would be able to benefit) and promote a more equitable distribution of the same: those who benefit would do so more equally. All of these factors would provide for greater cohesion, not only in the corporation but in civil society as well. In the Politics, Aristotle presents us with two kinds of regimes wherein the many in a given constituency rule: democracies and polities (Pltcs, 1279a–b). We have democracies when the majority that governs pursues their own particular interests and, on the contrary,...

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