Found 15 article(s) for author 'Business ethics'

Stock Market Distress Signal: How Low-Cost Index Funds Are Taking Over

Stock Market Distress Signal: How Low-Cost Index Funds Are Taking Over. John Coates, December 12, 2018, “Sounding the alarm on index funds. How their runaway success has reshaped power and accountability in boardrooms and on Wall Street. Guests – John Coates, professor of law and economics at Harvard Law School where he teaches corporate governance, mergers and acquisitions and finance. Member of the Investor Advisory Committee of the Securities and Exchanges Commission. (@jciv) Link

 

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The social purpose of corporations

The social purpose of corporations. Nien-he Hsieh, November 13, 2018, Paper, “To think about the purpose of corporations is to think about what corporations are for. In the article, argue that the concept of a purpose has an important role in thinking about the moral evaluation of corporations. We make three contributions. First, we distinguish different uses of the concepts of social and corporate purpose. Social purpose concerns the contribution that the corporation makes to realising societal goals. Corporate purpose concerns the goals the corporation should actively pursue. Second, we investigate whether corporations ought to serve a social purpose and whether corporations ought to actively pursue their corporate purpose. Third, we explore critically what roles the concepts of social and corporate purpose can fulfil in moral reflection on and of corporations. In particular, we distinguish the constructive, the communicative, and the critical role of social and corporate purpose.Link

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What Would It Take to Get Businesses to Focus Less on Shareholder Value?

What Would It Take to Get Businesses to Focus Less on Shareholder Value? Rebecca Henderson, August 21, 2018, Opinion, “Last week, Massachusetts Senator Elizabeth Warren announced that she’s about to propose the most significant change in U.S. corporate governance in 100 years. We don’t yet have the full details, but one reading of her piece is that she’s going to propose requiring every company with more than $1 billion in revenue to become a “benefit corporation” — a corporation whose fiduciary duty is not only to its shareholders but to all its major “stakeholders.”Link

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The Right Way for Companies to Publicize Their Social Responsibility Efforts

The Right Way for Companies to Publicize Their Social Responsibility Efforts. Michael Kremer, April 2, 2018, Opinion, ““Why don’t we get credit for all the good things we do?” the CEO of a major global corporation asked me recently. After all, the company has innovative and impactful programs to ensure safe working conditions; training programs to help low-wage workers in its supply chain increase their earnings; numerous environmental initiatives to reduce its use of water, energy, and raw materials; diversity and volunteering programs for employees; and a foundation that makes generous contributions both locally and globally. Yet no one seems to notice.Link

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More and More CEOs Are Taking Their Social Responsibility Seriously.

More and More CEOs Are Taking Their Social Responsibility Seriously. Rebecca Henderson, February 12, 2018, Opinion, “Jana Partners, the activist hedge fund, isn’t known as a tree-hugging hippie sort of firm. Yet, last month it joined with the California State Teachers’ Retirement System to send a letter to Apple’s board warning about the effects of the company’s devices on children. The same month, Blackrock CEO Larry Fink sent a letter telling companies that his firm would consider social responsibility when making investments. And Mark Zuckerberg told investors that Facebook would be making changes to its platform that would help users in the long-term, even though, he warned, in the short-term the result would be users spending less time on it.Link

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Wells Fargo’s board members are getting off too easy

Wells Fargo’s board members are getting off too easy. Lawrence Summers, February 6, 2018, Opinion, “A question I am asked as frequently as any other is: “Why didn’t anyone go to jail for the financial crisis?” There was huge suffering, sufficient misbehavior that the largest banks had to pay well over $100 billion in fines, and in the past, people had gone to jail for financial shenanigans during the Depression and the S&L crisis. People are usually indignant as they ask the question.Link

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Consumers Avoid Buying from Firms with Higher CEO-to-Worker Pay Ratios

Consumers Avoid Buying from Firms with Higher CEO-to-Worker Pay Ratios. Rohit Deshpandé, Michael I. Norton, January 31, 2018, Paper, “We document a novel driver of consumer behavior: pay ratio disclosure. Swiss corporation performance data gathered during a legally mandated pay ratio referendum reveals that salient high pay ratios are associated with decreased firm sales (Pilot Study). An incentive-compatible field experiment shows that, when ratios are revealed, consumers avoid firms with high ratios relative to competitors (Study 1).Link

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Does Financial Misconduct Affect the Future Compensation of Alumni Managers?

Does Financial Misconduct Affect the Future Compensation of Alumni Managers? Boris Groysberg, George Serafeim, November 15, 2017, Paper, “We explore how an organization’s financial misconduct may affect pay for former employees not implicated in wrongdoing. Drawing on stigma theory we hypothesize that although such alumni did not participate in the financial misconduct and they had left the organization years before the misconduct, they experience a compensation penalty. Our results support this prediction. The stigma effect increases in relation to the job function proximity to the misconduct, recency of the misconduct, and an employee’s seniority. Collectively, our results suggest that the stigma of financial misconduct could reach alumni employees and need not be confined to executives and directors that oversaw the organization during the misconduct.” Link

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Swinging between Moral and Market Imperatives

Swinging between Moral and Market Imperatives. Julie Battilana, 2017, Paper, “Financial institutions with religious affiliations are active participants in the financial market, engaging in various risky financial behaviors, yet existing studies of religion and risk preferences yield inconsistent findings. Informed by institutional theory, we argue that moral imperatives are foundational for religious organizations’ identity; as such, the nature of the risky financial behaviors in which religious financial institutions engage matters. By examining religious credit unions’ engagement in the risky financial product- private- label mortgage-backed security (PMBS), we argue that religious credit unions shun financial products associated with deception, greed, and excessive value extractions that clash with the core moral principles of probity, justice, and trust that are fundamental to religious identity.Link

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What Corporate Bankruptcy Can Teach Us About Morality

What Corporate Bankruptcy Can Teach Us About Morality. Mihir Desai, June 27, 2017, Audio, “Does the world of finance and markets needs a good infusion of humanity? One book examines how how a wider reading of the humanities can help you understand finance and — at the same time — how finance can help you understand the human condition. It’s by economist and Harvard Business School Professor Mihir Desai.  He joined Marketplace Morning Report host David Brancaccio to discuss his latest book, “The Wisdom of Finance: Discovering Humanity in the World of Risk and Return.”Link

 

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