Handbook on Responsible Leadership and Governance in Global Business
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Handbook on Responsible Leadership and Governance in Global Business

Edited by Jonathan P. Doh and Stephen A. Stumpf

Ethics, social responsibility, leadership, governance. These terms are heard in the classroom, in the boardroom, and viewed on the front page of newspapers and magazines. Yet serious attention to the relationships among these concepts is lacking. Although commitments to leadership, ethics, and social responsibility are evident, individuals and companies are falling short in combining these duties into policies and cultures that guide behavior and decisions. The missing element is a broad-based and integrated approach to responsible leadership and governance. This volume provides the leading thinking on these issues and includes a discussion of emerging areas that require future attention.
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Chapter 16: Responsible Leadership: A Cross-Cultural Perspective

Sonja A. Sackmann


Sonja A. Sackmann1 Introduction The cases of Enron, Tyco and WorldCom in the US, Barings Bank in the UK, Ahold in The Netherlands and Parmalat in Italy have shaken up not only the business world but society at large on a worldwide scale. What happened so that well respected companies all of a sudden had to declare bankruptcy, turning from reported success to huge failure? How could some of them deceive and betray the investment community, employees, shareholders, customers, suppliers and even auditors in such magnitude? Why did existing governance structures fail? How could well respected and accomplished CEOs and business leaders behave in such a way that – in hindsight – can only be characterized as irresponsible and/or fraudulent? These events raise questions that are still searching for explanations. One approach in trying to find answers is to question and scrutinize existing corporate governance. Is the US governance structure, in which CEO and chairman can be the same person, the major problem, as opposed to governance structures in which these positions have to be filled by different people? Is it the composition of boards, their working style, their members’ time pressure, or their exposure to limited information? Or is it the kind of leadership in a firm that allows cases like Enron to happen? These issues, as well as the Sarbanes-Oxley Act of 2002, suggest that institutional, organizational, personal and interpersonal issues may play a role in the conduct of organizations and their leaders. Consequently, corporate governance structures, corporate citizenship and...

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