Abstract
The relationship between corporate governance and business ethics has always been ambiguous. Does corporate governance per definition have an ethical nature or is it merely self-interested? Is business ethics an integral part of corporate governance or is it marginalised or even excluded by the debate on corporate governance? Does corporate governance also include the governance of ethics? This article will focus on the relationship between corporate governance and business ethics from the perspective of a developing country. More specifically, it will look at a recent development in South Africa where the Second Report on Corporate Governance for South Africa (IOD, 2002), also known as the Second King Report, gave particular prominence to business ethics. The motivation for its emphasis on business ethics as well as its guidelines for the corporate governance of ethics will be explored and, in conclusion, critically reviewed.
Highlights
Corporate governance has enjoyed unprecedented attention around the globe over the last decade
In some contexts its prominence was driven by the agency problem (Collier & Robberts, 2001:67) and investor activism (Rossouw, 2002:137), whilst in other contexts it was driven by the desire to attract foreign investment and to gain national and international legitimacy (Chernoff, 1999:2)
Does corporate governance per definition have an ethical nature or is it merely self-interested? Is business ethics an integral part of corporate governance or is it marginalised or even excluded by the debate on corporate governance? Does corporate governance include the governance of ethics?
Summary
Corporate governance has enjoyed unprecedented attention around the globe over the last decade. There are various reasons for its recent prominence. This article will focus on the relationship between corporate governance and business ethics from the perspective of a developing country. It will look at a recent development in South Africa where the Second Report on Corporate Governance for South Africa (2002), known as the Second King Report, gave particular prominence to business ethics. The motivation for its emphasis on business ethics as well as its guidelines for the corporate governance of ethics will be explored and, in conclusion, critically reviewed
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