Hostname: page-component-cd9895bd7-7cvxr Total loading time: 0 Render date: 2024-12-26T01:59:11.657Z Has data issue: false hasContentIssue false
  • English
  • Français

New Directions in Corporate Governance and Finance: Implications for Business Ethics Research

Published online by Cambridge University Press:  23 January 2015

Lori Verstegen Ryan ,
Ann K. Buchholtz  and
Robert W. Kolb
Get access Rights & Permissions [Opens in a new window]

Abstract:

Corporate governance and finance are dynamic academic fields that offer myriad opportunities for business ethics analysis. Within the corporate governance triad in recent years, shareholders have increased their power over boards of directors and executives through both regulation and movements to change corporate by-laws. The impact of board characteristics on firm performance has proven elusive, leading to questions concerning board processes and individual director beliefs and behaviors. At the same time, CEOs have lost considerable power, leaving many struggling to regain their control and maintain their compensation levels, while others adopt a stewardship approach to their posts. In the field of finance, the recent financial debacle has led to a reexamination of financial regulation and of the fundamental nature and purpose of the industry. All of these issues provide business ethicists fodder for investigation and analysis.

Type
Business Ethics Quarterly Twentieth Anniversary Forum, Part II: New Directions for Business Ethics Research
Information
Business Ethics Quarterly , Volume 20 , Issue 4 , October 2010 , pp. 673 - 694
Copyright
Copyright © Society for Business Ethics 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Anand, A. I. 2006. An analysis of enabling vs. mandatory corporate governance: Structures post-Sarbanes-Oxley. Delaware Journal of Corporate Law, 31: 229–52.Google Scholar
Angel, J., & McCabe, D. 2008. The ethics of managerial compensation: The case of executive stock options. Journal of Business Ethics, 78: 225–35.CrossRefGoogle Scholar
Anonymous, . 2009. Watchdog group: GM money-back guarantee paid for with tax dollars. U.S. Newswire. Washington. Sept. 14.Google Scholar
Bay, C. 2009. House passes reform legislation but scraps bankruptcy cramdowns. DSNews.com. Retrieved December 19, 2009, from http://www.dsnews.com/articles/house-passes-reform-legislation-but-scraps-bankruptcy-cramdowns-2009-12-11.Google Scholar
Berrone, P., & Gomez-Mejia, L. R. 2009. xsEnvironmental performance and executive compensation: An integrated agency-institutional perspective. Academy of Management Journal, 52: 103–26.CrossRefGoogle Scholar
Blandeburgo, B. 2009. Executive pay cuts rekindle “say-on-pay” flame in Washington. Money Morning (October 26): 1.Google Scholar
Boivie, S., Lange, D., McDonald, M. L., & Westphal, J. D. 2009. Me or we: The effects of CEO organizational identification on agency costs. Academy of Management Proceedings: 1–6.CrossRefGoogle Scholar
Borden, M. J. 2007. The role of financial journalists in corporate governance. Fordham Journal of Corporate & Financial Law, 12: 311–70.Google Scholar
Brammer, S., Millington, A., & Pavelin, S. 2009. Corporate reputation and women on the board. British Journal of Management, 20: 17–29.CrossRefGoogle Scholar
Brammer, S., & Pavelin, S. 2008. Factors influencing the quality of corporate environmental disclosure. Business Strategy & the Environment, 17(2): 120–36.CrossRefGoogle Scholar
Brav, A., Jiang, W., Partnoy, F., & Thomas, R. 2008. Hedge fund activism, corporate governance, and firm performance. Journal of Finance, 63: 1729–75.CrossRefGoogle Scholar
Briggs, T. W. 2007. Corporate governance and the new hedge fund activism: An empirical analysis. Journal of Corporation Law, 32: 682–737.Google Scholar
Byrne, J. A. 2000. The best and worst boards. Business Week (January 24): 142.Google Scholar
Callaghan, S. R., Saly, P. J., & Subramaniam, C. 2004. The timing of option repricing. Journal of Finance, 59: 1651–76.CrossRefGoogle Scholar
CalPERS. 2009. Proxy advisors back CalPERS majority vote bid at Harleysville National Corporation. Retrieved November 20, 2009, from http://www.calpers.ca.gov/index.jsp?bc=/about/press/pr-2009/april/majority-vote-harleysville.xml.Google Scholar
Carney, T. P. 2009. Chrysler, GM lobby a shareholder—the feds. The Washington (D.C.) Examiner (July 15): 15.Google Scholar
Certo, S., Dalton, C., Dalton, D., & Lester, R. 2008. Boards of directors’ self interest: Expanding for pay in corporate acquisitions? Journal of Business Ethics: 219–30.Google Scholar
Cosans, C. 2009. Does Milton Friedman support a vigorous business ethics? Journal of Business Ethics, 87: 391–99.CrossRefGoogle Scholar
Cremers, K. J. M., & Nair, V. B. 2005. Governance mechanisms and equity prices. Journal of Finance, 60: 2859–94.CrossRefGoogle Scholar
Daily, C. M., Dalton, D. R., & Cannella, A. A. 2003. Introduction to special topic forum. Corporate governance: Decades of dialogue and data. Academy of Management Review, 28: 371–82.CrossRefGoogle Scholar
Dalton, D. R., & Daily, C. M. 2001. Director stock compensation: An invitation to a conspicuous conflict of interests? Business Ethics Quarterly, 11: 89–108.CrossRefGoogle Scholar
Dalton, D. R., Daily, C. M., Certo, S. T., & Roengpitya, R. 2003. Meta-analyses of financial performance and equity: Fusion or confusion? Academy of Management Journal, 19: 269–90.Google Scholar
Dalton, D. R., Daily, C. M., Ellstrand, A. E., & Johnson, J. L. 1998. Meta-analytic reviews of board composition, leadership structure, and financial performance. Strategic Management Journal, 19: 269–90.3.0.CO;2-K>CrossRefGoogle Scholar
Davis, J. H., Schoorman, F. D., & Donaldson, L. 1997. Toward a stewardship theory of management. Academy of Management Review, 22: 20–47.CrossRefGoogle Scholar
De Cremer, D., Mayer, D. M., & Schminke, M. 2010. On understanding ethical behavior and decision making: A behavioral ethics approach. Business Ethics Quarterly, 20: 1–6.CrossRefGoogle Scholar
Dennis, B. 2010. Senate passes financial regulation bill. The Washington Post. Retrieved May 22, 2010, from http://www.washingtonpost.com/wp-dyn/content/article/2010/05/20/AR2010052003503_pf.html.Google Scholar
Devers, C. E., Cannella, A. A Jr., Reilly, G. P., & Yoder, M. E. 2007. Executive compensation: A multidisciplinary review of recent developments. Journal of Management, 33: 1016–72.CrossRefGoogle Scholar
Donaldson, T. 2008. Hedge fund ethics. Business Ethics Quarterly, 18: 405–16.CrossRefGoogle Scholar
Easterbrook, F. H., & Fischel, D. R. 1996. The economic structure of corporate law. Cambridge, MA: Harvard University Press.Google Scholar
Eccles, J. S., & Wigfield, A. 2002. Motivational beliefs, values, and goals. Annual Review of Psychology, 53(1): 109–32.CrossRefGoogle ScholarPubMed
Elsayed-Elkhouly, S. M., & Buda, R. 1997. A cross-cultural comparison of value systems of Egyptians, Americans, Africans and Arab executives. International Journal of Commerce & Management, 7(3/4): 102–19.CrossRefGoogle Scholar
Elson, C. 2009. Conversations. Corporate Board, 30: 32.Google Scholar
Fanelli, A., Misangyi, V. F., & Tosi, H. L. 2009. In charisma we trust: The effects of CEO charismatic visions on securities analysts. Organization Science, 20: 1101–33.CrossRefGoogle Scholar
Fich, E. M., & Shivdasani, A. 2006. Are busy boards effective monitors? Journal of Finance, 61: 689–724.CrossRefGoogle Scholar
Finegold, D., Benson, G. S., & Hecht, D. 2007. Corporate boards and company performance: Review of research in light of recent reforms. Corporate Governance: An International Review, 15: 865–78.CrossRefGoogle Scholar
Finkelstein, S., Hambrick, D. C., & Cannella, A. A. 2009. Strategic leadership: Theory and research on executives, top management teams, and boards. New York: Oxford University Press.Google Scholar
Finkelstein, S., & Mooney, A. C. 2003. Not the usual suspects: How to use board process to make boards better. Academy of Management Executive, 17: 101–13.Google Scholar
Forbes, D. P., & Milliken, F. J. 1999. Cognition and corporate governance: Understanding boards of directors as strategic groups. Academy of Management Review, 24: 489–505.CrossRefGoogle Scholar
Fraser, J., & Simkins, B. 2010. Enterprise risk management: Today’s leading research and best practices for tomorrow’s executives. Hoboken, NJ: John Wiley & Sons, Inc.Google Scholar
Friedman, Milton. 1966. The methodology of positive economics, in Milton, Friedman, Essays in positive economics, 3–16. Chicago: University of Chicago Press.Google Scholar
Gerding, E. F. 2006. The next epidemic: Bubbles and the growth and decay of securities regulation. Connecticut Law Review, 38: 393–453.Google Scholar
Goldfarb, Z. A. 2010. Goldman Sachs executives face senators investigating role in financial crisis. Washington Post (April 28): A-1.Google Scholar
Guiso, L., Sapienza, P., & Zingales, L. 2008. Trusting the stock market. Journal of Finance, 63: 2557–2600.CrossRefGoogle Scholar
Hambrick, D. C., & Brandon, G. (Eds.). 1988. Executive values. Greenwich, CT: JAI Press.Google Scholar
Hambrick, D. C., Werder, A. v., & Zajac, E. J. 2008. New directions in corporate governance research. Organization Science, 19: 381–85.CrossRefGoogle Scholar
Hamlin, A. 2009. Alternatives for dealing with underwater options. Employee Benefit Plan Review, 64(10): 10–12.Google Scholar
Harrington, C. 2003. Socially responsible investing. Journal of Accountancy, 195 (January): 1–11.Google Scholar
Hillman, A. J. 2005. Politicians on the board of directors: Do connections affect the bottom line? Journal of Management, 31: 464–81.CrossRefGoogle Scholar
Hillman, A. J., & Hitt, M. A. 1999. Corporate political strategy formulation: A model of approach, participation, and strategy decisions. Academy of Management Review, 24: 825–42.CrossRefGoogle Scholar
Hillman, A. J., Nicholson, G., & Shropshire, C. 2008. Directors’ multiple identities, identification, and board monitoring and resource provision. Organization Science, 19: 441–56.CrossRefGoogle Scholar
Huse, M., & Zattoni, A. 2008. Trust, firm life cycle, and actual board behavior: Evidence from “one of the lads” in the board of three small firms. International Studies of Management & Organization, 38(3): 71–97.CrossRefGoogle Scholar
Investment Weekly News. 2009. Microsoft board authorizes “say-on-pay” advisory vote on executive compensation (October 10): 338.Google Scholar
Jacoby, S. M., Nason, E. M., & Saguchi, K. 2005. The role of the senior HR executive in Japan and the United States: Employment relations, corporate governance, and values. Industrial Relations, 44(2): 207–41.CrossRefGoogle Scholar
Jennings, M. M. 2008. Some thoughts on ethics, governance, and markets: A look at the subprime saga. Corporate Finance Review, 12(4): 40–46.Google Scholar
Jones, D. 2007. Aflac plans to allow shareholders to vote on pay for top executives. USA Today (February 14): A-1.Google Scholar
Joo, T. W. 2003. A trip through the maze of “corporate democracy”: Shareholder voice and management composition. St. John’s Law Review, 77: 735–67.Google Scholar
Kahan, M., & Rock, E. B. 2007. Hedge funds in corporate governance and corporate control. University of Pennsylvania Law Review, 155: 1021–93.Google Scholar
Kahneman, A., Slovic, P., & Tversky, A. 1982. Judgment under uncertainty: Heuristics and biases. New York: Cambridge University Press.CrossRefGoogle Scholar
Kahneman, A., & Tversky, A. 1979. Prospect theory: An analysis of decision making under risk. Economietrica, 47(2): 263–91.CrossRefGoogle Scholar
Kanagaretnam, K., Lobo, G., & Mohammad, E. 2009. Are stock options grants to CEOs of stagnant firms fair and justified? Journal of Business Ethics, 90: 137–55.CrossRefGoogle Scholar
King, N Jr., McCracken, J., & Spector, M. 2009. The GM bankruptcy: Potential conflicts abound in government role. Wall Street Journal: A14.Google Scholar
Kolb, R. 2010. Lessons from the financial crisis: Causes, consequences, and our economic future. Hoboken, NJ: John Wiley & Sons, Inc.CrossRefGoogle Scholar
Kolb, R. Forthcoming. The financial crisis of our time. New York: Oxford University Press.Google Scholar
Leblanc, R., & Schwartz, M. S. 2007. The black box of board process: Gaining access to a difficult subject. Corporate Governance: An International Review, 15: 843–51.CrossRefGoogle Scholar
Le Breton-Miller, I., & Miller, D. 2009. Agency vs. stewardship in public family firms: A social embeddedness reconciliation. Entrepreneurship: Theory & Practice, 33: 1169–91.Google Scholar
Lee, M., & Ermann, D.M. 1999. Pinto “madness” as a flawed landmark narrative: An organizational and network analysis. Social Problems, 46(1): 30–47.CrossRefGoogle Scholar
Lesser, H., Hoffman, M. F., & Bromfield, W. H. 2006. Majority voting: Where are we now? Insights: The Corporate & Securities Law Advisor, 20(6): 10–17.Google Scholar
Lester, R. H., Hillman, A. M. Y., Zardkoohi, A., & Cannella, A. A Jr. 2008. Former government officials as outside directors: The role of human and social capital. Academy of Management Journal, 51: 999–1013.CrossRefGoogle Scholar
Macey, J. R. 2008. Corporate governance: Promises kept, promises broken. Princeton, NJ: Princeton University Press.CrossRefGoogle Scholar
Marcoux, A. M. 2003. A fiduciary argument against stakeholder theory. Business Ethics Quarterly, 13: 1–24.CrossRefGoogle Scholar
Markowitz, Harry. 1952. Portfolio selection. The Journal of Finance, 7(1): 77–91.Google Scholar
McDonald, M. L., Khanna, P., & Westphal, J. D. 2008. Getting them to think outside the circle: Corporate governance, CEOs’ external advice networks, and firm performance. Academy of Management Journal, 51: 453–75.CrossRefGoogle Scholar
McGregor, J. 2009. New law gives shareholders more power. Business Week. Retrieved December 19, 2009, from http://www.businessweek.com/magazine/content/09_32/b4142052691566.htm.Google Scholar
Milinski, M. 1987. Tit for tat in stickle-backs and the evolution of cooperation. Nature, 325: 433–35.CrossRefGoogle Scholar
Modine, A. 2009. Cisco shareholders win say-on-pay. Financial News. Retrieved December 19, 2009, from http://www.theregister.co.uk/2009/11/14/cisco_say_on_pay/.Google Scholar
Monks, R. A. G., & Minow, N. 2008. Corporate governance. Cambridge, MA: Blackwell.Google Scholar
Moriarty, J. 2005. Do CEOs get paid too much? Business Ethics Quarterly, 15: 257–81.CrossRefGoogle Scholar
Moriarty, J. 2009. How much compensation can CEOs permissibly accept? Business Ethics Quarterly, 19: 235–50.CrossRefGoogle Scholar
Nathan, C., Brauer, R., & Papadima, R. 2010. Proxy access: Where are we now and where should we go? The Corporate Governance Advisor, 18 (January/February): 16–21.Google Scholar
Nielsen, R. P. 2008. The private equity-leveraged buyout form of finance capitalism. Business Ethics Quarterly, 18: 379–404.CrossRefGoogle Scholar
Oosterbeek, H., Sloof, R. & van de Kuilen, G. 2004. Differences in ultimatum game experiments: Evidence from a meta-analysis. Experimental Economics, 7: 171–88.CrossRefGoogle Scholar
Pollock, T. G., Chen, G., Jackson, E. M., & Hambrick, D. C. 2010. How much prestige is enough? Assessing the value of multiple types of high-status affiliates for young firms. Journal of Business Venturing, 25: 6–23.CrossRefGoogle Scholar
Posner, B. 2010. Values and the American manager: A three-decade perspective. Journal of Business Ethics, 91: 457–65.CrossRefGoogle Scholar
Pozen, R. C. 2003. Institutional perspective on shareholder nominations of corporate directors. Harvard Discussion Paper No. 429. Retrieved December 19, 2009, from http://law.harvard.edu/programs/olin_center/corporate_governance/papers/No429.03.Pozen.pdf.CrossRefGoogle Scholar
Ravasi, D., & Zattoni, A. 2006. Exploring the political side of board involvement in strategy: A study of mixed-ownership institutions. Journal of Management Studies, 43: 1671–1702.CrossRefGoogle Scholar
Rosenberg, A. 1994. Economics: Mathematical politics or science of diminishing returns? Chicago: University of Chicago Press.Google Scholar
Rothacker, R. 2009. BofA to pay back $45 billion: By exiting TARP, the Charlotte behemoth will free itself from federal curbs on executive pay. Raleigh (NC) News & Observer (December 3): A-1.Google Scholar
Schneider, M., and Ryan, L. V. Forthcoming. A review of hedge funds and their investor activism: Do they help or hurt other equity investors? Journal of Management & Organization.Google Scholar
Schwartz, Gary T. 1991. The myth of the Ford Pinto case. Rutgers Law Review, 43: 1013–68.Google Scholar
Serwer, A. 2009. The decade from hell. Time 174(22): 30.Google Scholar
Shropshire, C. 2010. The role of the interlocking director and board receptivity in the diffusion of practices. Academy of Management Review, 35: 246–64.Google Scholar
Thaler, R. 1993. Advances in behavioral finance. New York: Russell Sage Foundation.Google Scholar
Uhlaner, L., Wright, M., & Huse, M. 2007. Private firms and corporate governance: An integrated economic and management perspective. Small Business Economics, 29: 225–41.CrossRefGoogle Scholar
van Ees, H., Gabrielsson, J., & Huse, M. 2009. Toward a behavioral theory of boards and corporate governance. Corporate Governance: An International Review, 17: 307–19.CrossRefGoogle Scholar
Weber, J., & McGivern, E. 2010. A new methodological approach for studying moral reasoning among managers in business settings. Journal of Business Ethics, 92: 149–66.CrossRefGoogle Scholar
Westphal, J. D., & Bednar, M. K. 2008. The pacification of institutional investors. Administrative Science Quarterly, 53: 29–72.CrossRefGoogle Scholar
Westphal, J. D., & Clement, M. B. 2008. Sociopolitical dynamics in relations between top managers and security analysts: Favor rendering, reciprocity, and analyst stock recommendations. Academy of Management Journal, 51: 873–97.CrossRefGoogle Scholar
Westphal, J. D., & Graebner, M. E. 2010. A matter of appearances: How corporate leaders manage the impressions of financial analysts about the conduct of their boards. Academy of Management Journal, 53: 15–44.CrossRefGoogle Scholar
Wiesenfeld, B. M., Wurthmann, K. A., & Hambrick, D. C. 2008. The stigmatization and devaluation of elites associated with corporate failures: A process model. Academy of Management Review, 33: 231–51.CrossRefGoogle Scholar
Williams, C. C., & Ryan, L. V. 2007. Courting shareholders: The ethical implications of altering corporate ownership structures. Business Ethics Quarterly, 17: 669–88.CrossRefGoogle Scholar
Williams, R. J. 2003. Women on corporate boards of directors and their influence on corporate philanthropy. Journal of Business Ethics, 42: 1–10.CrossRefGoogle Scholar
Zhang, X., Bartol, K. M., Smith, K. G., Pfarrer, M. D., & Khanin, D. M. 2008. CEOs on the edge: Earnings manipulation and stock-based incentive misalignment. Academy of Management Journal, 51: 241–58.CrossRefGoogle Scholar
Zwolinski, M. 2008. The ethics of price gouging. Business Ethics Quarterly, 18: 347–78.CrossRefGoogle Scholar