It appears that in the 30 years that business ethics has been a discipline in its own right a model of business ethics has not been proffered. No one appears to have tried to explain the phenomenon known as ‚business ethics’ and the ways that we as a society interact with the concept, therefore, the authors have addressed this gap in the literature by proposing a model of business ethics that the authors hope will stimulate debate. The business ethics model (...) consists of three principal components (i.e. expectations, perceptions and evaluations) that are interconnected by five sub-components (i.e. society expects; organizational values, norms and beliefs; outcomes; society evaluates; and reconnection). The introduced model makes a contribution to the creation of a conceptual framework for business ethics. A few tentative conclusions may be drawn from the introduced model of business ethics. The model aspires to be highly dynamic. The ultimate outcome is dependent upon the evolution of time and contexts. It is also dependent upon and provides reference to the behaviours and perceptions of people. The model proposes business ethics to be a continuous and an iterative process. There is no actual end of the process, but a constant reconnection to the initiation of successive process iterations of the business ethics model. The principals and sub-components of the model construct the dynamics of this continuous process. They provide guidance on what and how to explore our common efforts to understand the phenomenon known as business ethics. The model provides opportunities for further research in the field of business ethics. (shrink)

It appears that in the 30 years that business ethics has been a discipline in its own right a model of business ethics has not been proffered. No one appears to have tried to explain the phenomenon known as 'business ethics' and the ways that we as a society interact with the concept, therefore, the authors have addressed this gap in the literature by proposing a model of business ethics that the authors hope will stimulate debate. The business ethics model (...) consists of three principal components that are interconnected by five sub-components. The introduced model makes a contribution to the creation of a conceptual framework for business ethics. A few tentative conclusions may be drawn from the introduced model of business ethics. The model aspires to be highly dynamic. The ultimate outcome is dependent upon the evolution of time and contexts. It is also dependent upon and provides reference to the behaviours and perceptions of people. The model proposes business ethics to be a continuous and an iterative process. There is no actual end of the process, but a constant reconnection to the initiation of successive process iterations of the business ethics model. The principals and sub-components of the model construct the dynamics of this continuous process. They provide guidance on what and how to explore our common efforts to understand the phenomenon known as business ethics. The model provides opportunities for further research in the field of business ethics. (shrink)

How does a board of directors decide what is right? The contest over this question is frequently framed as a debate between shareholder value and stakeholder rights, between a utilitarian view of the ethics of corporate governance and a deontological one. This paper uses a case study with special circumstances that allows us to examine in an unusually clear way the conflict between shareholder value and other bases on which a board can act. In the autumn of 2010, the board (...) of Liverpool Football Club sold the company to another investing group against the explicit wishes of the owners. The peculiar circumstances of this case provide insight into the conflict between ethical approaches to board decisions, allowing us to see certain issues more clearly than we can in listed corporations with many shareholders. What the analysis suggests is that the board saw more than one type of utility on which to base its ethical decision, and that one version resonated with perceived duties to stakeholders. This alignment of outcomes of strategic value with duties contrasted with the utility of shareholder value. While there are reasons to be cautious in generalizing, the case further suggests reasons why boards may reject shareholder value, in opposition to mainstream notions of corporate governance, without rejecting utility as a base of their decisions. Further, the partial alignment of duty and utility facilitates a pragmatic decision rather than one based on a priori claims. (shrink)

How does a board of directors decide what is right? The contest over this question is frequently framed as a debate between shareholder value and stakeholder rights, between a utilitarian view of the ethics of corporate governance and a deontological one. This paper uses a case study with special circumstances that allow us to examine in an unusually clear way the conflict between shareholder value and other bases on which a board can act. In the autumn of 2010, the board (...) of Liverpool Football Club sold the company to another investing group against the explicit wishes of the owners. The peculiar circumstances of this case provide insight into the conflict between ethical approaches to board decisions, allowing us to see certain issues more clearly than we can in listed corporations with many shareholders. What the analysis suggests is that the board saw more than one type of utility on which to base its ethical decision, and that one version resonated with perceived duties to stakeholders. This alignment of outcomes of strategic value with duties contrasted with the utility of shareholder value. While there are reasons to be cautious in generalizing, the case further suggests reasons why boards may reject shareholder value, in opposition to mainstream notions of corporate governance, without rejecting utility as a base of their decisions. Further, the partial alignment of duty and utility facilitates a pragmatic decision rather than one based on a priori claims. (shrink)

The Prudent Investor Rule creates a potential ethical dilemma for investment advisors selling over-the-counter financial products issued by their firms. The "opportunity" to defraud investors using complex, over-the-counter derivative securities designed for client-specific risk management is much higher than for exchange traded securities. This paper emphasizes the ethical responsibility held by trustees and their organizations to eliminate potential conflict of interests through internal control and monitoring. Independent evaluations of the performance of investment advisors and independent appraisals of complex over-the-counter securities (...) are important in reducing the risks of conflicts of interest. Recent lessons learned from the corporate ethics crisis and requirements of the 2002 Sarbanes Oxley Act would suggest that conflict of interest must be eliminated with third party validation of derivative pricing. By performing due diligence and validation, the trustee is able to satisfy the requirements under the Prudent Investor Rule. (shrink)

Organizational governance has historically focused around the perspective of principals and managers and has traditionally pursued the goal of maximizing owner wealth. This paper suggests that organizational governance can profitably be viewed from the ethical perspective of organizational followers - employees of the organization to whom important ethical duties are also owed. We present two perspectives of organizational governance: Principal Theory that suggests that organizational owners and managers can often be ethically opportunistic and take advantage of employees who serve them (...) and Principle Theory that focuses on guiding principles that are sometimes taken too far in organizations. In introducing these two new organizational governance perspectives, we offer insights into the value of rethinking ethical duties owed to organizational followers. (shrink)