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Corporate Directors and Social Responsibility: Ethics versus Shareholder Value

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  • Jacob Rose

Abstract

This paper reports on the results of an experiment conducted with experienced corporate directors. The study findings indicate that directors employ prospective rationality cognition, and they sometimes make decisions that emphasize legal defensibility at the expense of personal ethics and social responsibility. Directors recognize the ethical and social implications of their decisions, but they believe that current corporate law requires them to pursue legal courses of action that maximize shareholder value. The results suggest that additional ethics education will have little influence on the decisions of many business leaders because their decisions are driven by corporate law, rather than personal ethics. Copyright Springer Science+Business Media, Inc. 2007

Suggested Citation

  • Jacob Rose, 2007. "Corporate Directors and Social Responsibility: Ethics versus Shareholder Value," Journal of Business Ethics, Springer, vol. 73(3), pages 319-331, July.
    • Handle: RePEc:kap:jbuset:v:73:y:2007:i:3:p:319-331
    DOI: 10.1007/s10551-006-9209-z
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    References listed on IDEAS

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    1. Paula L. Rechner & Dan R. Dalton, 1991. "CEO duality and organizational performance: A longitudinal analysis," Strategic Management Journal, Wiley Blackwell, vol. 12(2), pages 155-160, February.
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