Corporate directors and social responsibility: ethics versus shareholder value

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Abstract

This paper reports on the results of an experiment conducted with experienced corporate directors. The study findings indicate that directors employ prospective rationality cognition, and they sometimes make decisions that emphasize legal defensibility at the expense of personal ethics and social responsibility. Directors recognize the ethical and social implications of their decisions, but they believe that current corporate law requires them to pursue legal courses of action that maximize shareholder value. The results suggest that additional ethics education will have little influence on the decisions of many business leaders because their decisions are driven by corporate law, rather than personal ethics.

Original languageEnglish
Pages (from-to)319-331
Number of pages13
JournalJournal of Business Ethics
Volume73
Issue number3
DOIs
Publication statusPublished - 2007
Externally publishedYes

Keywords

  • Board of director
  • Ethics
  • Social responsibility

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