The majority of North American corporations awakened to the need for their own ethical guidelines during the late 1970s and early 1980s, even though modern corporations are subject to a surprising multiplicity of external codes of ethics or conduct. This paper provides an understanding of both internal and external codes through a discussion of the factors behind the development of the codes, an analysis of internal codes and an identification of problems with them.

The failure of the critics of corporate governance to agree on what should be done to improve the governance process can, in most cases, be traced to a different understanding of the role of corporate directors in that process. This article analyzes and contrasts the obligations of directors under two legal theories, the fictional person theory and the organic theory, of the corporation. A comparison of the director's obligations under each theory indicates that the organic theory provides a better basis (...) for assessing the performance of directors and initiating reform.Among the boards of directors of Fortune 500 companies, I estimate that 95% are not fully doing what they are legally, morally, and ethically supposed to do. And they couldn't, even if they wanted to. (shrink)

While the focus on business ethics is increasing in business school curricula, there has been little systematic scholarly research on the forces which bring about ethical behavior. This article is intended as a first step toward that research by creating a catalogue of hypotheses concerning the efficacy of corporate codes of ethics. The hypotheses are drawn from studies of compliance with law and court decisions and theories of legitimacy, authority, public policy making and individual behavior. Hypotheses are proposed based on (...) the structure of the organization, the source of the code of ethics within the organization, the content of the code, sanctions for noncompliance, protections for refusal to engage in unethical behavior, and rewards for compliance. (shrink)

Culture is shaped by a handful of people who are guardians of the vision and the shapers of the corporate conscience. It is especially the role of the chief executive to define the character of the business and to establish the corporate culture.A corporation can instill within its basic policy structure and patterns of behavior a corporate culture, a corporate conscience that can prevail.

Many large corporations now have written codes of ethics to guide the business/marketing activities of employees. The purpose of this study was to determine the frequency and types of topics which are covered in the ethics policy statements of large U.S. corporations. The results indicated that the topics covered most often (respectively) were: misuse of funds/improper accounting, conflicts of interest, political contributions, and confidential information. It is concluded that in addition to written ethics policy statements, top management should communicate ethical (...) values and demonstrate by example. (shrink)