Business Sustainability, Corporate Governance, and Organizational Ethics

CHAPTER 2The Role and Responsibilities of Business in Society

1. Introduction

Public companies are a major engine of economic growth and prosperity in the free enterprise system in advanced capitalist economies such as the United States. More than half of the population in the United States invests in public companies and are affected by corporations’ performance. This unprecedented accumulation of economic power in public companies underscores the important role that these companies play in society and the relevance of their business sustainability, corporate governance, and organizational ethics. Shareholders who invest capital are often remote by distance or knowledge from those managing corporations. This chapter presents the role and responsibilities of business in society with a keen focus on public companies’ contribution to the nations’ economic growth and prosperity. The concept of profit-with-purpose business organizations is gaining attention as society and investors are holding corporations accountable for securing desired financial returns for investors while achieving social and environmental impacts.

Learning Objectives

• Understand the role and responsibilities of business in society.
• Understand the corporate governance structure and its mechanism.
• Identify the different layers of shareholders and stakeholders and understand their roles and responsibilities.
• Identify the causes and effects of the 2007–2009 global financial crisis. and be aware of its impacts ...