21012 Corporate Governance and Business Ethics

Subject level: Postgraduate

Handbook description

Corporate governance and business ethics have become prominent public concerns in recent years. Issues of corporate governance originated in the separation of ownership and control in the modern corporation, and various explanations of the resulting problems of control. The subject examines the different institutional elements of corporate governance and how these impact on economic performance. The internal mechanisms of governance are considered, and the wider influence of investors and stakeholders. The case for corporate social and environmental responsibility is also considered, and the continuing challenges and dilemmas of corporate governance.

Subject objectives/outcomes

On successful completion of this subject students should be able to:

1. understand the origins of the separation of ownership and control in the modern corporation and different explanations of the resulting problems of control
2. understand the wider institutional elements of corporate governance, and how these impact upon economic performance
3. understand insights into the internal political mechanisms of corporate governance including the role of the board, audit and disclosure
4. understand different cultural approaches to corporate governance
5. identify the significance of business ethics, and understand the ethical and moral dilemmas of business
6. identify the impact of the international effort to reform corporate governance
7. understand the pressures for corporate social and environmental responsibility
8. recognise the continuing dilemmas of corporate governance.

Contribution to graduate profile

This subject provides a foundation to understanding the ownership and control problems of the business enterprise, and the different systems that attempt to resolve these issues. It focuses on the original and contemporary problems of how to establish effective ownership and control of businesses; the different corporate governance systems and processes by which ownership and control is assured; an understanding of the different institutional, cultural and political environments in which businesses must operate; and a recognition of the eternal ethical dilemmas of enterprise.

Teaching and learning strategies

Lectures and group discussions; case analysis and presentation; and workshops and directed study using reading and library search; Internet search and analysis of material; corporate governance evaluation software products.

Content

• Foundations of corporate governance
• The institutional elements of corporate governance
• The political mechanisms of corporate governance
• Market based systems of corporate governance
• Relationship based systems of corporate governance
• The significance of business ethics
• Developing practices and emerging standards of governance
• Corporate social and environmental responsibility.

Assessment

Assessment item 1: Assignment 1: (Individual)

Assessment item 2: Assignment 2: (Group)

Assessment item 3: Assignment 3: (Individual)

Required text(s)

Clarke, T, 2007, International Corporate Governance: A Comparative Approach, London: Routledge.

Indicative references

Primary reading

Cadbury, A. (2002). Corporate Governance and Chairmanship: A Personal View, Oxford University Press

Clarke, T. (2004). Theories of Corporate Governance: The Philosophical Foundations of Corporate Governance, Routledge

De George, R. T. (2006). Business Ethics 61h edition, Pearson Prentice Hall. New Jersey

Fritzsche, D. J. (2005). Business Ethics: A Global and Managerial Perspective, McGraw-Hill

Hartman, L. P. (2005). Perspectives in business ethics, McGraw-Hill

Monks, R. A. G. and N. Minow (2004). Corporate Governance, Blackwell Publishing

O'Sullivan, M. (2000). Contests for Corporate Control: Corporate Governance and Economic Performance in the United States and Germany, Oxford University Press, USA

Secondary reading

Berle, A.A. and Means, G.C. (1932) 'The Modern Corporation and Private Property', New York: Commerce Clearing House; New York: Harcourt, Brace and World 1962)

Blair, M.M. (1995) 'Ownership and Control: Rethinking Corporate Governance for the 21st Century', Washington DC: Brookings Institute

Bingham, K. (2000) 'International Corporate Governance: A Management Report on the Rise of Global Governance', Gee Publishing, London

Burnham, J. (1941) The Managerial Revolution, New York: John Day Company

Cadbury, A. (1992) 'The Committee on the Financial Aspects of Corporate Governance', London: Gee and Company

Clarke, T. (2003) 'Cycles of Confidence: Crisis and Reform in Corporate Governance, Centre for International Business and Management, International Corporate Governance Colloquium, Judge Management Institute, University of Cambridge

Clarke,T. and Monkhouse, E., (1994) Rethinking the Company, London: Financial Times, Pitman

Clarke, T. and Bostock, R. (1994) International Corporate Governance: Convergence and Diversity, in, T.Clarke and E.Monkhouse, Rethinking the Company, London: Financial Times, Pitman

Clarke,T, (1998) The Stakeholder Corporation: A Business Philosophy for the Information Age, Long Range Planning, 31, 2, 182–194

Cohen, B. (1997) The Edge of Chaos: Financial Booms, Bubbles, Crashes and Chaos,

Chichester: Wiley

Dore, R. (2000) Stock Market Capitalism: Welfare Capitalism – Japan and Germany Versus the Anglo-Saxons, Oxford University Press

Finkelstein, S. and Mooney, A. (2002) Not the Usual Suspects: An Exploration and Conceptualisation of Board Process, Strategic Management Society Annual Conference, Paris, France

Galbraith, J.K. (1955) The Great Crash, London:Hamish Hamilton

Gregg, P., Machin, S. and Szymanski, S. (1993) The Disappearing Relationship Between Director's Pay and Corporate Performance, British Journal of Industrial Relations, 31, 1, 1–9

Gregory, H. (2002) Comparison of Key Board-Related Aspects of Sarbanes-Oxley and the NYSE and NASDAQ Corporate Governance Proposed Listing Standards, Weil, Gotshal and Manges, New York

Hopt, K. (1984) New Ways in Corporate Governance, Michigan Law Review, 82, 1338-63

Krugman, P.(1998) America the Boastful, Foreign Affairs, Vol 77, No3, pp 32-45

Learmont, S. (2002) Corporate Governance: What Can Be Learned from Japan? Oxford University PressLingle,C. (1997) The Rise and Decline of the Asian Century, Hong Kong: Asia 2000 Ltd

Lipton, M. (1992) Takeover Bids and United States Corporate Governance, The Oxford Law Colloquium

Lipton, M. and Lorsch, J. (1991) A New Compact for Owners and Directors, Harvard Business Review, July-August, 141-143

Lorsch, J. and MacIver, E. (1989) Pawns of Potentates: The Reality of America's Corporate Boards, Boston, MA: Harvard Business School Press

Mayce, M.L. (1971) Directors: Myth and Reality, Massachusetts: Harvard Business School Press; republished with new preface, Harvard Business School Classic Edition, 1986

McCahery, J.A., Moerland, P., Raaijmakers,T. and Renneboog, L. (2002) Corporate Governance Regimes: Convergence and Diversity, Oxford University Press

Millstein, I.M. (2001) The Evolution of Corporate Governance in the United States – Briefly Told, The Forum for US-EU Legal Economic Affairs, Rome Italy, September 12-15, 2001

Monks, RAG, and Minow, N. (1991) Power and Accountability, New York: HarperCollins

Monks, RAG, (1998) The Emperor's Nightingale: Restoring the Integrity of the Corporation, Oxford: Captstone

OECD, (1999) Principles of Corporate Governance, Paris: Organisation for Economic Cooperation and Development

Peacock, A. and Bannock, G. (1991) Corporate Takeovers and the Public Interest, Aberdeen University Press

Pound, J. (1992) Beyond Takeovers: Politics Comes to Corporate Control, Harvard Business Review, Mar-Apr, 83-93

Prowse, S. (1998) Corporate Governance in East Asia: A Framework for Analysis, Managing Capital Flows: National and International Dimensions, Conference, 15-16 June 1998, Bangkok, Thailand

Schumpeter, J.A. (1939) Business Cycles, New York: McGraw Hill

Soros, G. (1998) The Crisis of Global Capitalism, London: Little Brown and Company

Weil, Gotshal and Manges (2002) Comparative Study of Corporate Governance Codes Relevant to the European Union and Its Member States, Final Report and Annexes, Weil, Gotshal and Manges, New York

Websites

Academic:

Centre for Corporate Governance, UTS www.ccg.uts.edu.au

Center for Corporate Governance, Dartmouth http://mba.tuck.dartmouth.edu/ccg

Centre for Corporate Law and Securities Regulation, Melbourne http://cclsr.law.unimelb.edu.au

International Institute for Corporate Governance, Yale http://iicg.som.yale.edu

Social Science Research Network http://papers.ssrn.com

Government:

Australian Securities and Investments Commission www.asic.gov.au

HK Securities and Futures Commission www.hksfc.org.hk

Japan Financial Services Agency www.fsa.go.jp/indexe.html

Singapore Monetary Authority www.mas.gov.sg

UK Financial Services Authority www.fsa.gov.uk

US Securities and Exchange Commission www.sec.gov/index.htm

Commercial:

Australian Institute of Company Directors www.companydirectors.com.au

Business Council of Australia www.bca.com.au

Business Roundtable: Corporate Governance www.brtable.org/issue.cfm/2

Institutional Shareholder Services www.issproxy.com

Value Alliance www.thevaluealliance.com

Other stakeholders:

Business for Social Responsibility www.bsr.org

Centre for Social and Environmental Accounting Research www.ceres.org

CorpWatch www.corpwatch.org/home/PHH.jsp

Executive Paywatch www.aflcio.org/corporateamerica/paywatch

Investor Responsibility Research Center www.irrc.org

United for a Fair Economy www.faireconomy.org/

Institutions:

Asian Corporate Governance Association www.acga-asia.org/index.cfm

Australian Stock Exchange www.asx.com.au

Brookings Institution: Corporate Governance www.brook.edu/gs/research/areas/corporate/corporate_hp.htm

Corporate Governance, Japan www.rieti.go.jp/cgj/en/index.htm

Corporate Library www.thecorporatelibrary.com

European Corporate Governance Institute www.ecgi.org

Global Reporting Initiative www.globalreporting.org

International Business Ethics Institute www.business-ethics.org

International Corporate Governance Network www.icgn.org

International Organization of Securities Commissions www.iosco.org

Organisation for Economic Cooperation and Development www.oecd.org

World Bank – Private Sector Development (Corporate Governance) www.worldbank.org/privatesector/cg

World Bank Institute – Private Sector Development (Corporate Governance and Competitiveness) www.worldbank.org/wbi/corpgov