Entrepreneurship, Governance and Ethics

Abstract

A joint special issue conference on Law, Ethics and Finance was held at the York University Schulich School of Business, 16-18 September, 2010. The event was sponsored by the Schulich School of Business and the CFA Institute, with the cooperation of two leading academic journals, the Journal of Business Ethics and the European Journal of Finance. Amongst over 50 papers submitted for each of the two special issues, 19 were invited for presentation at the conference. The authors repre? sented 9 countries: Australia, Belgium, China, France, Italy, the Netherlands, Spain, the UK and the US. Michael Jensen, Jesse Isidor Straus Profes? sor of Business Administration, Emeritus, Harvard Business School, gave a keynote presentation on Financial Market Integrity. The authors at the con? ference represented a variety of perspectives from ethics, entrepreneurship, governance, economics, law and finance, thereby enabling interesting inter? disciplinary discussion and debate. The event began on 16 September 2010 with a Panel Discussion on 'Financial Market Integrity: Paths Forward,' which included Michael Jensen, Jesse Isidor Straus Professor of Business Administra? tion, Emeritus, Harvard Business School, Robert Bertram, CFA, former Executive President of the Ontario Teachers' Pension, Jeff Diermeier, CFA, former President and CEO of the CFA Institute, Susan Wolburgh Jenah, CEO of the Investment Industry Regulatory Organisation of Canada. The panel members discussed current topics on ethics, market integrity and the role of regulation in facil? itating market integrity. The panel made particular note of the lack of a regulatory structure in Canada for facilitating financial market integrity, and this deficiency increases the cost of capital for Canadian firms. The items discussed highlighted the intersec? tion of law, ethics, governance, entrepreneurship and finance, which provided a strong kick-start to the academic sessions on 17 and 18 September 2010. In the keynote address on 17 September 2010, Professor Jensen distinguished integrity from ethics, morality and legality, and highlighted the role of integrity in enhancing organisational efficiency. Legality refers to the system of laws and regulations of right and wrong behaviour of a person, group, or entity that are enforceable only by the state through a policing a judicial process with penalties. Ethics refers to the agreed on standards of what is desirable and undesirable, of right and wrong conduct or behaviour of a person, group or entity. Morality refers to the societal generally acceptable standards of what is desirable or undesirable, and right and wrong conduct of people, groups or entities. Integrity encompasses legality, ethics and morality. Key aspects of integrity include honouring one's word, telling people when you are not able to honour your work as soon as you become aware you are not able to fulfil your promise, and taking steps to fix the mess that is created when you do not honour one's word. Professor Jensen gave examples of improvements in organisation efficiency associ? ated after implementing a code of integrity. One example was about the organisation that he