This study explores the impact of mood on individuals’ ethical decision-making processes through the Graham [Graham, J. W.: 1986, Research in Organizational Behavior 8, 1–52] model of Principled Organizational Dissent. In particular, the research addresses how an individual’s mood influences his or her willingness to report the unethical actions of a colleague. Participants’ experienced an affectively charged, unrelated event and were then asked to make a decision regarding whistle-blowing intentions in a public accounting context. As expected, negative mood was associated (...) with lower intentions to report the unethical actions of others to a superior within the organization. The Graham model, which proposes that reporting intentions are impacted by the three determinants of seriousness, personal responsibility and cost, was employed to more clearly understand the nature of the affect–reporting intention relationship. The role of affect was explained by demonstrating that two determinants mediate the relationship between mood and whistle-blowing intentions. Specifically, as seriousness and responsibility have a positive impact on reporting intentions, the reduction of these perceptions by negative mood reduces the intent to report. The negative impact of personal cost on reporting intentions was significant, although not as a mediator of mood. (shrink)

This review summarizes and critiques the empirical ethical decision-making literature from 1996–2003. One hundred and seventy-four articles were published in top business journals during this period. Tables are included that summarize the findings by dependent variable – awareness, judgment, intent, and behavior. We compare this review with past reviews in order to draw conclusions regarding trends in the ethical decision-making literature and to surface directions for future research.

In response to the lack of empirical studies examining the internal disclosure behavior in the Chinese context, this study tested a whistleblowing -decision-making process among employees in the Chinese banking industry. For would-be whistleblowers, positive affect and organizational ethical culture were hypothesized to enhance the expected efficacy of their whistleblowing intention, by providing collective norms concerning legitimate, management-sanctioned behavior. Questionnaire surveys were collected from 364 employees in 10 banks in the Hangzhou City, China. By and large, the findings supported the (...) hypotheses. Issues of whistleblowing in the Chinese context and implications were discussed. (shrink)

This paper describes and discusses the Enron Corporation debacle. The paper presents the business ethics background and leadership mechanisms affecting Enron''s collapse and eventual bankruptcy. Through a systematic analysis of the organizational culture at Enron (following Schein''s frame of reference) the paper demonstrates how the company''s culture had profound effects on the ethics of its employees.

This paper investigates the differences in perceptions between business students and service-sector managers regarding the role that ethics and social responsibility serve in determining organizational effectiveness. An organizational effectiveness instrument containing business ethics and social responsibility items served as a questionnaire for a sample of 151 senior business undergraduates and 53 service-sector managers. The results indicated that while students acting as managers rate some social responsibility issues as more important than do managers, they also rate ethical conduct and a few (...) dimensions of social responsibility lower than do managers. The findings have direct implications for both business practitioners and educators. (shrink)

The authors review the empirical literature in order to assess which variables are postulated as influencing ethical beliefs and decision making. The variables are divided into those unique to the individual decision maker and those considered situational in nature. Variables related to an individual decision maker examined in this review are nationality, religion, sex, age, education, employment, and personality. Situation specific variables examined in this review are referent groups, rewards and sanctions, codes of conduct, type of ethical conflict, organization effects, (...) industry, and business competitiveness. The review identifies the variables that have been empirically tested in an effort to uncover what is known and what we need to know about the variables that are hypothesized as determinants of ethical decision behavior. (shrink)

The purpose of this study is to expand our understanding of the factors that influence ethical behavioral intentions of public accountants. Recent scandals have dominated the news and have caused legislators, regulators and the public to question the role of the accounting profession. Legislative changes have brought about major structural changes in the profession and continued scrutiny will surely lead to further changes. Thus, developing an understanding of the personal and contextual factors that influence ethical decisions is critical. An extension (...) of the theory of planned behavior [Ajzen, I.: 1985, Action Control-From Cognition to Behavior (Springer, Heidelberg)], the model used in this study examined the influence of personal, social and organizational factors on ethical intentions. Specifically, the individual level model tested direct effects of attitudes, subjective norms, perceived behavioral control, moral sensitivity and ethical climate. Professionals from five accounting firms completed a survey that measured responses to ethical dilemmas related to the public accounting domain. To minimize the potential impact of common method bias, the survey instrument was administered in two phases. Hypotheses were evaluated using a structural modeling technique, partial least squares. Results show strong support for a direct relationship between attitudes and ethical intentions. The proposed direct effect of subjective norms was not supported. However, a significant relationship between subjective norms and attitudes was found. Professionals’ attitudes towards ethical issues clearly influence intentions. Moreover, this study illustrates the potential influence of social factors in attitude formation. Future research should explore the factors in the public accounting domain that most strongly influence attitude formation. This study suggests that the theory of reasoned action offers a useful framework for exploring these issues. (shrink)

This study was conducted to determine how culture influences the ethical perception of managers. Most studies conducted so far have only stated similarities and differences in ethical perception between cultural or ethnic groups and little attention has been paid towards understanding how cultural values influence the ethnic groups' ethical perception. Moreover, most empirical research in this area has focused on moral judgement, moral decision making and action, with limited empirical work in the area of ethical perception. A total of 22 (...) interviews were conducted and the questionnaire survey yielded 272 managerial responses. Three implications were obtained based on the findings of the study. The first implication is that differences in ethical perception can exist when one culture attributes moral significance to something that another culture does not. The results of the study also suggest that similarities in ethical perception can occur when a situation is viewed as an accepted and institutionalised part of doing business. Finally, the findings of the study also show that the influence of culture on ethical perception varied according to the different types of scenarios. (shrink)

The purpose of the present study is to examine the attitudes of Portuguese chartered accountants with respect to questions of ethical nature that can arise in their professional activity. Respondents were asked to respond to the Ethics Position Questionnaire developed by Forsyth (Journal of Personality and Social Psychology 39(1), 175–184, 1980), in order to determine their idealism and relativism levels. Subsequently, they answered questions about five scenarios related to accounting practices, with the objective of measuring their ethical judgments. Based on (...) the idealism and relativism levels of our respondents, they were classified into one of four groups, representing different ethical ideologies (absolutism, exceptionism, subjectivism, and situationism). The results indicated that age was the major determinant of relativism. Contrary to previous research, older respondents revealed themselves significantly more relativistic than younger ones. Gender seems to be the most important determinant of ethical judgments; against expectations, men evidenced significantly stricter judgments than women in two of the five scenarios. Findings also indicated that respondents’ ethical judgments did not differ significantly based on their ethical ideology, supporting the idea that ethical ideology is not an important determinant of ethical judgments. (shrink)

Ethics instructors often use cases to help students understand ethics within a corporate context, but we need to know more about the impact a case-based pedagogy has on students’ ability to make ethical decisions. We used a pre- and post-test methodology to assess the effect of using cases to teach ethics in a finance course. We also wanted to determine whether recent corporate ethics scandals might have impacted students’ perceptions of the importance and prevalence of ethics in business, so we (...) used in-depth case studies of several of the major scandals (e.g., Enron, Tyco, Adelphia). Our results are somewhat surprising since studying ethics scandals positively impacts students’ ethical decision making and their perceptions of the ethics of businesspeople. (shrink)

This study examined the impact of perceived ethical culture of the firm and selected demographic variables on auditors' ethical evaluation of, and intention to engage in, various time pressure-induced dysfunctional behaviours. Four audit cases and questionnaires were distributed to experienced pre-manager level auditors in Ireland and the U. S. The findings revealed that while perceived unethical pressure to engage in dysfunctional behaviours and unethical tone at the top were significant in forming an ethical evaluation, only perceived unethical pressure had an (...) impact on intention to engage in the behaviours. Country was also found to have a significant impact, with U. S. respondents reporting higher ethical evaluations and lower intentions to engage in unethical acts than Irish respondents. Implications of the findings and areas for future research are discussed. (shrink)

This paper presents the responses of 118 executives to a mail survey which examined their views of business ethics and various business practices. In addition to identifying various sources of ethical conflict, current business practices are also examined with respect to how ethical or unethical each is believed to be. Results are also presented which outline executive responses to four ethical business situations. Overall conclusions to the study are outlined, as well as future research needs.

The study examines the relationship between the strength of an organizationÕs ethical climate and ethical problems involving human resource management. Data were collected through a survey of 1078 human resource managers. The results indicate a statistically significant negative relationship between the strength of an organization'ss ethical climate and the seriousness of ethical violations and a statistically significant positive relationship between an organization'ss ethical climate and success in responding to ethical issues. Thus, interventions that strengthen an organization'ss ethical climate may help (...) manage ethical behavior within organizations. (shrink)

This article concerns itself with the relationship between implicit moral cognitions and decisions in the realm of business ethics. Traditionally, business ethics research emphasized the effects of overt or explicit attitudes on ethical decision-making and neglected intuitive or implicit attitudes. Therefore, based on an implicit social cognition approach it is important to know whether implicit moral attitudes may have a substantial impact on managerial ethical decision-making processes. To test this thesis, a study with 50 participants was conducted. In this study (...) the participants were asked to work on a deliberative managerial ethical decision-making task, in which they had to decide on one of two options. Implicit moral attitudes towards the two options were measured using the implicit association test (IAT). A semantic differential scale was used to diagnose explicit moral attitudes towards the two options. Each step taken within the deliberative decision-making process, as well the decision itself, was assessed using a scoring model-based decision analysis and a decision-making questionnaire. The results of this study show that implicit moral attitude has a great influence on the deliberative ethical decision-making process. The derived conclusion is that complex and deliberative decision-making processes in the context of business ethics can be affected by implicit social cognitions such as implicit moral attitudes. (shrink)

'The book is not only valuable, it is readable and...featur[es] three sterling chapters toward the end.'--COMMONWEAL.

This review summarizes and critiques the empirical ethical decision-making literature from 1996-2003. One hundred and seventy-four articles were published in top business journals during this period. Tables are included that summarize the findings by dependent variable - awareness, judgment, intent, and behavior. We compare this review with past reviews in order to draw conclusions regarding trends in the ethical decision-making literature and to surface directions for future research.

This paper posits that organizational variables are the factors that lead to the moral decline of companies like Enron and Worldcom. The individuals involved created environments within the organizations that precipitated a spiral of unethical decision-making. It is proposed that at the executive level, it is the organizational factors associated with power and decision-making that have the critical influence on moral and ethical behavior. The study has used variables that were deemed to be surrogate measures of the ethical violations (OSHA (...) and EPA violations), the risky shift phenomenon (executive team size), banality of wrong-doing (reputation score for firms) and escalating commitment (tenure with the firm/change in revenue for declining firms). The research found that there were small correlations between ethical violations and the three organizational variables. (shrink)

In this study, we propose considering membership in the Ethics Officer Association (EOA) as a proxy for the firm''s commitment to ethical decision making, and we analyze the influence of firm- and CEO-specific characteristics on this commitment. While we observe a positive relationship between membership and firm size, we also document a negative relationship between EOA membership and the executive''s time in position and, to a more modest extent, accounting returns. Pursuing this further, we present evidence that firms with past (...) legal issues may seek EOA membership as a signal of their intention to be compliant in the future. (shrink)

We test conformity-related values applying the value-pragmatics hypothesis by evaluating how personal values related to compliance moderate the relationships between situational factors and unethical decisions. We examine the direct and indirect effects of the values of traditionalism, conformity, and stimulation, as they combine with the situational factors of rewards and punishments in the person–situation interaction model. We find strong support for the value-pragmatics view of ethical decision making and further build support for the person–situation interaction model.

Despite a strong sensitization to the corruption problem and a large body of interdisciplinary research, scientists have only rarely investigated which motivational, volitional, emotional, and cognitive components make decision makers in companies act corruptly. Thus, we examined how their interrelation leads to corruption by proposing an action model. We tested the model using a business simulation game with students as participants. Results of the PLS structural equation modeling showed that both an attitude and subjective norm favoring corruption led to a (...) desire to act corruptly. Given high perceived behavioral control, this desire was transformed into an intention that finally resulted in corrupt action. Components related to general private and professional goals did not allow for any prediction. Based on these results, we discuss preventative measures and methods for combating intra- and inter-organizational corruption. (shrink)

The research purpose of the study is to investigate and identify correlates of ethical behaviour and attitudes of individuals currently working or pursuing a business‐related graduate degree in Cyprus. Analysis of the quantitative questionnaire revealed that the majority of the respondents had a concept of ‘ethical behaviour’, consider ethics important, and hold attitudes that are conducive to ethical behaviour in business. In addition, findings revealed significant differences in three correlates: age, gender and position. Finally, reflecting the findings, the authors suggest (...) specific actions that aim to improve ethical decision making in the Cyprus business environment. (shrink)

Moral imagination is a process that involves a thorough consideration of the ethical elements of a decision. We sought to explore what might distinguish moral imagination from other ethical approaches within a complex business simulation. Using a three-component model of moral imagination, we sought to discover whether organization cultures with a salient ethics theme activate moral imagination. Finding an effect, we sought an answer to whether some individuals were more prone to being influenced in this way by ethical cultures. We (...) found that employees with strong moral identities are less influenced by such cultures than employees whose sense of self is not defined in moral terms. (shrink)

This paper considers ethical decision making by blending three streams of related research: cognitive moral development of the decision maker, rational choice theory and a subjective expected utility model. Ethical dilemmas can be defined as situations where moral certainty is compromised by rational cognition. In this paper, the authors assume that some people use a morality-first perspective and others a rationality-first perspective. Ethical scenarios were written and used to test hypotheses derived from this perspective. The instrument developed was shown to (...) be in need of further refinement. Results are discussed in terms of relationships between participant-characteristics variables overall and subscale responses to the ethical scenarios. (shrink)

. Recent corporate scandals have focused the attention of a broad set of constituencies on reforming corporate governance. Boards of directors play a leading role in corporate governance and any significant reforms must encompass their role. To date, most reform proposals have targeted the legal, rather than the ethical obligations of directors. Legal reforms without proper attention to ethical obligations will likely prove ineffectual. The ethical role of directors is critical. Directors have overall responsibility for the ethics and compliance programs (...) of the corporation. The tone at the top that they set by example and action is central to the overall ethical environment of their firms. This role is reinforced by their legal responsibilities to provide oversight of the financial performance of the firm. Underlying this analysis is the critical assumption that ethical behavior, especially on the part of corporate leaders, leads to the best long-term interests of the corporation. We describe key components of a framework for a code of ethics for corporate boards and individual directors. The proposed code framework is based on six universal core ethical values: (1) honesty; (2) integrity; (3) loyalty; (4) responsibility; (5) fairness; and (6) citizenship. The paper concludes by suggesting critical issues that need to be dealt with in firm-based codes of ethics for directors. (shrink)

Since manager's decisions impact organizational goals and organizational ethical behavior, this researcher investigated the degree to which there are differences in the moral reasoning ability of business managers of selected industries and whether there are significant differences between top, middle, and first-line management levels. To determine the relationship between managers' locus of control and their moral reasoning ability, this study considered three independent variables: reported organizational ethical climate, locus of control, and selected demographic and institutional variables. For a foundation, this (...) researcher relied on Kohlberg's theory of moral development, Victor and Cullen's ethical work climate theory, and Rotter's theory of internal—external locus of control (which evolved from Carl Jung). The short form of Rest's DIT instrument measured the moral reasoning abilities of the participants. The selected demographic and institutional variables (age, work tenure, education, gender, management level and industry category) provided the useful information to investigate these relationships of moral reasoning ability of individual managers. A survey questionnaire was sent to 400 managerial and executive level employees at a random sample of Fortune 500 firms throughout the United States: Dun and Bradstreet provided the researcher with a proportional stratified random sample of these 400 managerial and executive level employees at a variety of organizations. Interestingly, women in this study exhibited slightly higher (more external) mean I—E scores and (more principled) higher mean “P” score than men. While both of these results were anticipated, neither was significant. However, one major finding of this study was the statistically significant relationship between age and perceived organizational ethical climate types (Caring, Law and Code, Rule, Instrument, and Independence). Another major finding revealed a statistically significant relationship between management levels and organizational ethical climate. (shrink)

While most large companies around the world now have a code of ethics, reported ethical malpractice among some of these does not appear to be abating. The reasons for this are explored, using academic studies, survey reports as well as insights gained from the Institute of Business Ethics' work with large corporations. These indicate that there is a gap between the existence of explicit ethical values and principles, often expressed in the form of a code, and the attitudes and behaviour (...) of the organisation. The paper suggests that two basic reasons appear to be at the heart of the problem: ineffective ethics programmes and deficiencies in corporate culture. The paper concludes that successfully embedded corporate ethical values requires well-designed ethics policies, sustained ethical leadership and incorporation of ethics in organisational processes and strategy as part of an ethical culture at all levels of the organisation. It makes some practical suggestions on how this can be achieved. (shrink)

While most large companies around the world now have a code of ethics, reported ethical malpractice among some of these does not appear to be abating. The reasons for this are explored, using academic studies, survey reports as well as insights gained from the Institute of Business Ethics' work with large corporations. These indicate that there is a gap between the existence of explicit ethical values and principles, often expressed in the form of a code, and the attitudes and behaviour (...) of the organisation. The paper suggests that two basic reasons appear to be at the heart of the problem: ineffective ethics programmes and deficiencies in corporate culture. The paper concludes that successfully embedded corporate ethical values requires well‐designed ethics policies, sustained ethical leadership and incorporation of ethics in organisational processes and strategy as part of an ethical culture at all levels of the organisation. It makes some practical suggestions on how this can be achieved. (shrink)

This study uses judgment and decision-making (JDM) perspective with the help of framing and schema literature from cognitive psychology to evaluate how managers behave when problems with unethical overtones are presented to them in a managerial frame rather than an ethical frame. In the proposed managerial model, moral judgment of the situation is one of the inputs to managerial judgment, among several other inputs regarding costs and benefits of various alternatives. Managerial judgment results in managerial intent leading to managerial action. (...) The model and the effects of taking an ethics course on ethical and managerial judgment and managerial intent were then indirectly tested in this study, wherein subjects judged the ethical wrongness, managerial badness, and the managerial intent regarding decisions made in a case. Forty-nine MBA students analyzed a case involving budget-based bonuses and production, in which the ethical issue evolved over three stages. It appears from the Path-analysis results that managerial judgment mediated between moral judgment and the judgment of managerial intent as suggested by the proposed model, and that taking an ethics course directly affected managerial judgment but did not affect the moral judgment. Additionally, in the first stage of decision-making (early stage of a developing “ethical slippery slope”), moral judgment did not significantly influence managerial judgment. However, students with ethics course still were more inclined to judge the decision as managerially bad as compared to others, indicating that they were more aware or sensitive to the moral issues involved. (shrink)

The research purpose of the study is to investigate and identify correlates of ethical behaviour and attitudes of individuals currently working or pursuing a business‐related graduate degree in Cyprus. Analysis of the quantitative questionnaire revealed that the majority of the respondents had a concept of ‘ethical behaviour’, consider ethics important, and hold attitudes that are conducive to ethical behaviour in business. In addition, findings revealed significant differences in three correlates: age, gender and position. Finally, reflecting the findings, the authors suggest (...) specific actions that aim to improve ethical decision making in the Cyprus business environment. (shrink)

This article examines the relationship between implicit mental processes and ethical decisions made by managers. Based on the dual-process view in social and cognitive psychology, it is argued that social cognition (e.g., moral judgments) can rely on two different modes of information processing. On one hand, moral judgments reflect explicit, conscious, and extensive cognitive processes, which are attributed to explicit attitude. On the other hand, moral judgments may also be based on implicit, automatic, and effortless processes referring to implicit attitude. (...) To test this thesis, a study involving 182 participants was conducted. The results support the thesis. (shrink)

This study examined the impact of perceived ethical culture of the firm and selected demographic variables on auditors’ ethical evaluation of, and intention to engage in, various time pressure-induced dysfunctional behaviours. Four audit cases and questionnaires were distributed to experienced pre-manager level auditors in Ireland and the U.S. The findings revealed that while perceived unethical pressure to engage in dysfunctional behaviours and unethical tone at the top were significant in forming an ethical evaluation, only perceived unethical pressure had an impact (...) on intention to engage in the behaviours. Country was also found to have a significant impact, with U.S. respondents reporting higher ethical evaluations and lower intentions to engage in unethical acts than Irish respondents. Implications of the findings and areas for future research are discussed. (shrink)

The purpose of this study is to expand our understanding of the factors that influence ethical behavioral intentions of public accountants. Recent scandals have dominated the news and have caused legislators, regulators and the public to question the role of the accounting profession. Legislative changes have brought about major structural changes in the profession and continued scrutiny will surely lead to further changes. Thus, developing an understanding of the personal and contextual factors that influence ethical decisions is critical. An extension (...) of the theory of planned behavior [Ajzen, I.: 1985, Action Control-From Cognition to Behavior ], the model used in this study examined the influence of personal, social and organizational factors on ethical intentions. Specifically, the individual level model tested direct eects of attitudes, subjective norms, perceived behavioral control, moral sensitivity and ethical climate. Professionals from five accounting firms completed a survey that measured responses to ethical dilemmas related to the public accounting domain. To minimize the potential impact of common method bias, the survey instrument was administered in two phases. Hypotheses were evaluated using a structural modeling technique, partial least squares. Results show strong support for a direct relationship between attitudes and ethical intentions. The proposed direct eect of subjective norms was not supported. However, a significant relationship between subjective norms and attitudes was found. Professionals' attitudes towards ethical issues clearly influence intentions. Moreover, this study illustrates the potential influence of social factors in attitude formation. Future research should explore the factors in the public accounting domain that most strongly influence attitude formation. This study suggests that the theory of reasoned action oers a useful framework for exploring these issues. (shrink)

The study examines the relationship between the strength of an organizationÕs ethical climate and ethical problems involving human resource management. Data were collected through a survey of 1078 human resource managers. The results indicate a statistically significant negative relationship between the strength of an organization'ss ethical climate and the seriousness of ethical violations and a statistically significant positive relationship between an organization'ss ethical climate and success in responding to ethical issues. Thus, interventions that strengthen an organization'ss ethical climate may help (...) manage ethical behavior within organizations. (shrink)

The goals of this research were to (1) explore the direct effects of and interactions between magnitude of consequences and various types of proximity - social, psychological, and physical - on the ethical decision-making process and (2) investigate the influence of empathy on the ethical decision-making process. A carpal tunnel syndrome vignette and questionnaire were administered to a sample of human resource management professionals to test the hypothesized relationships. Significant relationships were found for the main effects between magnitude of consequences (...) and principle-based evaluation, cognitive empathy and principle-based evaluation, and empathy and moral intention. Physical proximity moderated the relationships between magnitude of consequences and utilitarian evaluation as well as magnitude of consequences and moral intention. Cognitive empathy moderated the relationships between magnitude of consequences and principle-based evaluation and physical proximity and utilitarian evaluation. Affective empathy marginally moderated the relationship between physical proximity and principle-based evaluation. Future research directions, management implications, and strengths and weaknesses of the research are discussed. (shrink)

In this study, we propose considering membership in the Ethics Officer Association (EOA) as a proxy for the firm's commitment to ethical decision making, and we analyze the influence of firm- and CEO-specific characteristics on this commitment. While we observe a positive relationship between membership and firm size, we also document a negative relationship between EOA membership and the executive's time in position and, to a more modest extent, accounting returns. Pursuing this further, we present evidence that firms with past (...) legal issues may seek EOA membership as a signal of their intention to be compliant in the future. (shrink)

Relying on an expanded view of leadership and the moral reasoning framework developed by Lawrence Kohlberg (1981), this study explores the moral reasoning of the chief executive officers at the 11 largest automobile manufacturers in the world. Using the CEO's letter to their stakeholders found in the organizations' annual social responsibility reports, the CEOs' moral reasoning is compared to other managers' moral reasoning, and the moral reasoning exhibited within the CEO group is analyzed for differences due to regional location. Contrary (...) to conventional understanding based on prior research, the CEOs in our sample did not exhibit moral reasoning at a higher level than a cross section of managers but there were differences within the sample of CEOs when looking at nationality. Implications of these results for CEOs, managers, academics, and others are explored. (shrink)

The relationship between individuals’ creativity and their ethical ideologies appears to be complex. Applying Forsyth’s (1980, 1992) personal moral philosophy model which consists of two independent ethical ideology dimensions, idealism and relativism, we hypothesized and found support for a positive relationship between creativity and relativism. It appears that creative people are less likely than non-creative people to follow universal rules in their moral decision making. However, contrary to our hypothesis and the general stereotype that creative people are less caring about (...) others, we found a positive relationship between creativity and idealism. These findings indicate that highly creative people are likely to be what Forsyth called “situationists,” individuals with both an ethic of caring and a pragmatic moral decision-making style. The finding that creative individuals tend to be situationists, and particularly that they tend to be high in idealism, appears to refute the line of reasoning that argues for a “creative personality” characterized in part by social insensitivity. Understanding the relationship between creativity and ethical ideologies has important implications for researchers, managers and teachers. (shrink)

In this study, we propose considering membership in the Ethics Officer Association (EOA) as a proxy for the firm's commitment to ethical decision making, and we analyze the influence of firm- and CEO-specific characteristics on this commitment. While we observe a positive relationship between membership and firm size, we also document a negative relationship between EOA membership and the executive's time in position and, to a more modest extent, accounting returns. Pursuing this further, we present evidence that firms with past (...) legal issues may seek EOA membership as a signal of their intention to be compliant in the future. (shrink)