This article examines the work of professional service firms (PSFs) in their relationships with public corporations; work that is designed to ensure that investors and potential investors have information that will enable them to participate in the capital markets. Using an institutional theory lens, we view these efforts by PSFs as institutional maintenance work and specifically analyze their work related to policing (i.e., rating), enabling (i.e., tutoring), and embedding and routinizing (i.e., collaborating) that helps to support the capital market as (...) a core institution in society. We illustrate how there is a “dark” side to each of these forms of institutional work that exists because of ongoing conflicts of interest within and between their work practices. This dark side has the unintended consequence of producing often biased information or information unavailable to many. When a crisis brings this bias to light, some repair is introduced but often not enough to alleviate the distortion. Our contribution is, therefore, to shed light on the dark side of institutional maintenance work and to explore why repair is increasingly necessary, but often only partially effective. (shrink)

This article examines the work of professional service firms (PSFs) in their relationships with public corporations; work that is designed to ensure that investors and potential investors have information that will enable them to participate in the capital markets. Using an institutional theory lens, we view these efforts by PSFs as institutional maintenance work and specifically analyze their work related to policing (i.e., rating), enabling (i.e., tutoring), and embedding and routinizing (i.e., collaborating) that helps to support the capital market as (...) a core institution in society. We illustrate how there is a “dark” side to each of these forms of institutional work that exists because of ongoing conflicts of interest within and between their work practices. This dark side has the unintended consequence of producing often biased information or information unavailable to many. When a crisis brings this bias to light, some repair is introduced but often not enough to alleviate the distortion. Our contribution is, therefore, to shed light on the dark side of institutional maintenance work and to explore why repair is increasingly necessary, but often only partially effective. (shrink)

Abstract:While a ubiquitous phenomenon, initial public offerings (IPOs) have received no attention in the ethics literature. We provide an overview of a series of potential conflicts of interest that pervade the IPO process. We also report the results of an empirical assessment of IPOs and those elements that may inform a substantive moral hazard faced by key players in the period prior to and just after an IPO.

Abstract:While a ubiquitous phenomenon, initial public offerings (IPOs) have received no attention in the ethics literature. We provide an overview of a series of potential conflicts of interest that pervade the IPO process. We also report the results of an empirical assessment of IPOs and those elements that may inform a substantive moral hazard faced by key players in the period prior to and just after an IPO.

The current proxy voting system in the United States has become the subject of considerable controversy. Because institutional investment managers have the authority to vote their clients’ proxies, they have a fiduciary obligation to those clients. Frequently, in an attempt to fulfill that obligation, these institutional investors employ proxy advisory services to manage the thousands of votes they must cast. However, many proxy advisory services have conflicts of interest that inhibit their utility to those seeking to discharge their fiduciary duties. (...) In this article, we describe the current proxy advisory network as an example of how current notions of conflicts of interest fall short when explaining the behavior of an interconnected set of market players whose remit is to act in the best interests of their investors. We discuss what participants in this system should do to bring transparency and accuracy to the proxy advice industry. (shrink)

Abstract:While many aspects of stock and option based compensation for corporate officers remain controversial, we suggest that the growing trend for similar practices in favor of boards of directors will prove to be even more contentious. High-ranking corporate managers do not set their own salaries nor authorize their own stock options. By contrast, boards of directors do, in fact, set their own compensation packages. Other potential conflicts of interest include setting option performance targets, stock buybacks, stock option resets and reloads, (...) consolidations (mergers and acquisitions), and service on multiple boards. As trust is the most valuable commodity in a capitalist society, we suggest that these potential conflicts of interest and related outcomes may ultimately serve to erode any anticipated benefits of director stock compensation. (shrink)

In 1999, the Journal of Business Ethics published its 1 500th article. This article commemorates the journal's quest "to improve the human condition" (Michalos, 1988, p. 1) with a summary and assessment of the first eighteen volumes. The first part provides an overview of JBE, highlighting the journal's growth, types of methodologies published, and the breadth of the field. The second part provides a detailed account of the quantitative research findings. Major research topics include (1) prevalence of ethical behavior, (2) (...) ethical sensitivities, (3) ethics codes and programs, (4) corporate social performance and policies, (5) human resource practices and policies, and (6) professions – accounting, marketing/sales, and finance/strategy. Much remains to be done. (shrink)

While there are companies whose codes of ethics state that mere appearance of unethical behavior by employees is morally unacceptable, this so‐called appearance standard has hardly received any attention in the business ethics literature. Using corporate integrity theory, this article explores the criteria that may explain how mere appearances of unethical behavior can arise (i.e., the presence of conflicts of interests, the entanglement of these interests, a reputation for lack of integrity, and deviant outcomes) and those that may make such (...) appearances morally unacceptable (i.e., foreseeability, avoidability, and seriousness). The article proposes remedies for preventing and resolving instances when mere appearance of unethical behavior is morally unacceptable. (shrink)

Public relations scholars have demonstrated contradictory views regarding the application of universal versus culture-specific approaches for understanding global public relations ethics. However, few comparative studies have empirically explored public relations ethics on a global scale. To that end, this study represents an exploratory attempt to provide a descriptive picture of public relations professional associations and their codes of ethics across 107 countries. In conclusion, we argue that honesty, safeguarding of confidences of clients, and prohibition of conflicts of interest of competing (...) clients should be accepted as the universal values, while other issues, such as free flow of information and fees and gifts, could be understood as the relativistic values specific to a nation's situation and needs. (shrink)