Business Ethics and Corporate Governance, Second Edition

CORPORATE GOVERNANCE REQUIRES THE FREEDOM TO CREATE AND TO ExECUTE

In government, executive power is feared and thus checked—in the corporation it is desired and, therefore, fostered. Since a corporation is not a political community, checks and balances are not appropriate to it. In a corporation, the whole idea is to accomplish certain goals and to create something new. In government, the point is to keep leaders from doing anything beyond their stated powers. In corporations, we value swift action. Contrariwise, in government we desire judiciousness and deliberation.

Investors who have an idea, combine their resources, and attempt to create new wealth, create corporations. The corporation can only survive and prosper if it meets the needs of ...