Business Sustainability, Corporate Governance, and Organizational Ethics

CHAPTER 1The Free Enterprise System, Financial Markets, and Corporate Culture

1. Introduction

This chapter presents the importance and dynamics of relationships between capital markets and businesses as influenced by corporate culture, perceived by stakeholders (including investors), and transformed through business sustainability, corporate governance, and organizational ethics. Corporate and accounting scandals at the turn of the twenty-first century and the global 2007–2009 financial crisis eroded public trust and investor confidence in corporate America and in its financial reports. Several initiatives and reforms, including the Sarbanes-Oxley Act of 2002 (SOX), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the Securities and Exchange Commission (SEC) rules and regulations related to their implementation, as well as listing standards of national stock exchanges, corporate governance best practices, and business ethics guidance, were established to restore investor confidence in public financial information. These reforms and standards are a continuous process creating new measures and practices for public companies and their directors, officers, accountants, auditors, legal counsel, financial analysts, investing banks, and others to effectively fulfill their responsibilities and discharge their accountability. Impactful corporate culture, robust business environment, effective corporate governance, integrated business sustainability, enforceable ...