Business Ethics, 2nd Edition

Chapter Seven

Corporate Ethics: Good Governance

WHAT IS CORPORATE GOVERNANCE?

Corporate governance is typically perceived by academic literature as dealing with “problems that result from the separation of ownership and control.”¹ From this perspective, corporate governance would focus on: The internal structure and rules of the board of directors; the creation of independent audit committees; rules for disclosure of information to shareholders and creditors; and, control of management. Figure 7.1 explains how a corporation is structured.

Fig. 7.1 Separation of Ownership and Management

DEFINITIONS OF CORPORATE GOVERNANCE

Though the concept of ...