The Ancients against the Moderns: Focusing on the Character of Corporate Leaders

When a series of corporate scandals erupted soon after the collapse of the 1990s bull market in equities, policy makers and reformers chiefly responded by augmenting and refining the checks and balances surrounding publicly traded corporations. Through measures such as the Sarbanes-Oxley Act of 2002...

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Bibliographic Details
Published in:Journal of business ethics 2008-03, Vol.78 (3), p.373-387
Main Author: Bragues, George
Format: Article
Language:English
Subjects:
ancient philosophy
Aristotelean ethics
Benjamin Franklin
Business and Management
Business Ethics
Business structures
Business studies
Corporate governance
Corporate regulation
Corporations
Education
Enron
Ethics
Executive compensation
Financial management
Financial regulation
Leadership
Management
Management science
modern philosophy
Morality
Philosophy
Political leadership
Quality of Life Research
Regulation
Scandals
Securities issues
Securities regulations
Self interest
Shareholders
Society
Studies
Traditions
virtues
WorldCom securities regulation
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Summary:When a series of corporate scandals erupted soon after the collapse of the 1990s bull market in equities, policy makers and reformers chiefly responded by augmenting and refining the checks and balances surrounding publicly traded corporations. Through measures such as the Sarbanes-Oxley Act of 2002, securities regulations were intensified and corporate governance was tightened. In essence, reformers followed the tradition of modern political philosophy, developed in the 17th and 18th centuries, in its insistence that pro-social outcomes are best produced through institutional mechanisms that harness self-interest. The empirical evidence, however, suggests the institutional approach will do little to prevent future ethical breakdowns. To corroborate this finding, we survey the literature on board composition, auditor consulting practices, shareholder activism, and executive compensation. Consequently, we look to another stream of political philosophy, the ancient tradition comprising Plato and Aristotle, which argues that social groupings, such as corporations, work best when led by individuals of good character. Applying the ancient view to modern commercial realities, the paper concludes that Benjamin Franklin's attempt to connect virtuous character with enlightened self-interest offers a compelling ethic for corporate leaders.
ISSN:0167-4544
1573-0697
DOI:10.1007/s10551-006-9342-8