How can corporate governance foster ethical decisions and behaviors on the part of managers
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journal article CORPORATE GOVERNANCE, RESPONSIBLE MANAGERIAL BEHAVIOR, AND CORPORATE SOCIAL RESPONSIBILITY: ORGANIZATIONAL EFFICIENCY VERSUS ORGANIZATIONAL LEGITIMACY?Academy of Management Perspectives Vol. 28, No. 3 (August 2014) , pp. 289-306 (18 pages) Published By: Academy of Management https://www.jstor.org/stable/43822069 Read and download Log in through your school or library Alternate access options For independent researchers Read Online Read 100 articles/month free Subscribe to JPASS Unlimited reading + 10 downloads Purchase article $29.00 - Download now and later Abstract Building on corporate governance research and institutional theory, this paper explores interrelationships between the firm's corporate governance, responsible leadership, and corporate social responsibility approaches in different institutional contexts. We present a critique of corporate governance research grounded in agency theory with its focus on corporate social responsibility as mere compliance with rules and regulations. We link different leadership orientations and corporate social responsibility approaches to two key process dimensions of corporate governance related to monitoring and incentives. This analysis builds on previous research that differentiates between governance mechanisms based on strategic as opposed to financial controls and explains how these types of control may be related to responsible managerial behavior and the firm's corporate social responsibility strategies. Building on governance studies grounded in sociology and organizational theory, we further argue that links between corporate social responsibility strategies and corporate governance factors such as boards of directors, ownership patterns, and executive incentives may differ depending on the legal system and institutional characteristics in a specific country. Our discussion suggests that researchers need to develop a more holistic, institutionally embedded governance framework to analyze organizational approaches to corporate social responsibility. Journal Information The mission of the new Academy of Management Perspectives (AMP) is to provide accessible articles about important issues concerning management and business. AMP articles are aimed at the non-specialist academic reader, not practicing managers, and rely on evidence as opposed to theory or opinion for their arguments. All articles are fundamentally based on research evidence, which can be quantitative or qualitative, but not on opinion. Articles focus on the phenomenon of business and management rather than theory; they do not necessarily have to advance the existing academic literature. Articles might include reviews of what we already know about particular topics, with an orientation specifically toward practical implications. Descriptive articles and those without a theoretical foundation, typically excluded from academic journals, might also be relevant if they advance our understanding of business and management practice. Publisher Information The Academy of Management (the Academy; AOM) is a leading professional association for scholars dedicated to creating and disseminating knowledge about management and organizations. The Academy's central mission is to enhance the profession of management by advancing the scholarship of management and enriching the professional development of its members. The Academy is also committed to shaping the future of management research and education. Founded in 1936, the Academy of Management is the oldest and largest scholarly management association in the world. Today, the Academy is the professional home for more than 18290 members from 103 nations. Membership in the Academy is open to all individuals who find value in belonging. Rights & Usage This item is part of a JSTOR Collection. How does corporate governance promote ethical practices?Good corporate governance is about effectively supervising the management of a company to uphold the company's integrity, achieve more open and rigorous procedures and ensure legal compliance. Ultimately it should also promote good relations with stakeholders, including shareholders and employees.
How does corporate governance impact the decisions of management?Corporate governance grants company boards sufficient independence from the management teams and other stakeholder in companies. It empowers company boards to perform duties without undue interference from the management or dominant shareholders.
How does corporate governance help in decision making?The structure of corporate governance determines the distribution of rights and responsibilities between the different parties in the organization and sets the decision-making rules and procedures. It is usually up to the management board to decide how the company will develop.
What is corporate governance mechanism how can you relate it with ethical behavior?It is primarily focused on resolving conflicts of interest and in particular on minimizing agency costs between shareholders and company managers. According to the shareholder model, the role of (formal and informal) governance mechanisms is to reduce conflicts of interests, notably between shareholders and managers.
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