Journal of Business Ethics 89 (S1):39-49 (2009)

We examine the occurrence of ethicsrelated terms in 10-K annual reports over 1994-2006 and offer empirical observations on the conceptual framework of Erhard et al. 2007). We use a pre-Sarbanes-Oxley sample subset to compare the occurrence of ethics-related terms in our 10-K data with samples from other studies that consider virtue-related phenomena. We find that firms using ethics-related terms are more likely to be "sin" stocks, are more likely to be the object of class action lawsuits, and are more likely to score poorly on measures of corporate governance. The consistency of our results across these alternative measures of ethical behavior suggests that managers who portray their firm as "ethical" in 10-K reports are more likely to be systematically misleading the public. These results are consistent with the integrity-performance paradox.
Keywords Philosophy   Quality of Life Research   Management/Business for Professionals   Economic Growth   Ethics
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DOI 10.1007/s10551-008-9910-1
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References found in this work BETA

The Dirt on Coming Clean.Daylian M. Cain, George Loewenstein & Don A. Moore - 2007 - International Corporate Responsibility Series 3:81-99.
Managing for Organizational Integrity.Lynn S. Paine - 1994 - Harvard Business Review 72 (2):106-117.

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Commonality in Codes of Ethics.Margaret Forster, Tim Loughran & Bill McDonald - 2009 - Journal of Business Ethics 90 (S2):129 - 139.

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