Business Law, Public Responsibility, and Ethics Commons^™

Monitoring To Reduce Agency Costs: Examining The Behavior Of Independent And Non-Independent Boards, Anita Anand, Frank Milne, Lynnette Purda

Seattle University Law Review

Berle and Means’s analysis of the corporation—in particular, their view that those in control are not the owners of the corporation—raises questions about actions that corporations take to counter concerns regarding management’s influence. What mechanisms, if any, do corporations implement to balance the distribution of power in the corporation? To address this question, we analyze boards of directors’ propensity to voluntarily adopt recommended corporate governance practices. Because board independence is one way to enhance shareholders’ ability to monitor management, we probe whether firms with independent boards of directors (which we define as boards with either an independent chair or a …

Pedagogical Strategies For Teaching Moral Minimalism, Richard Mcgowan

Scholarship and Professional Work - Business

In 1986, Stephen Satris’s article, "Student Relativism," means to "offer analysis of, and suggest some methods for dealing with, a quite particular and peculiar problem in teaching philosophy…I speak of the problem of student relativism." (Satris, 1986, p. 193) The problem has not gone away.

However, psychological research suggests that the problem of relativism, a problem especially critical for teaching business ethics (or any other class in applied philosophy) is not insolvable. This paper, extending earlier work by R. McGowan, provides a brief account of research by Lawrence Kohlberg and William Perry on the structure of thought exhibited by students, …

Social Networking And The Perception Of Privacy Within The Millennial Generation, Andra Gumbus, Frances S. Grodzinsky, Stephen J. Lilley

WCBT Faculty Publications

Has technology caused a generational divide between current college age users (Millennial Generation) who have no problems posting intimate details of their personal life on the Web and more traditional older users who seem to value privacy? This paper presents the results of a survey of 251 university students and follow-up focus groups on the topic of the perceptions of social networking and privacy. We will use Facebook as an example of social networking, and review attitudes about privacy and control over personal information among traditional and non-traditional college age users and light and heavy users of social networking sites.

Securities Intermediaries And The Separation Of Ownership From Control, Jill E. Fisch

Seattle University Law Review

The Modern Corporation & Private Property is a paradigm-shifting analysis of the modern corporation. The book is perhaps best known for the insights of Berle and Means about the separation of ownership from control and the consequences of that separation for the allocation of power within the corporation. The Berle and Means story focuses on the shareholder as the owner of the corporation. Berle and Means saw the mechanism of centralized management—in which the shareholder retains the economic interest but not the control rights associated with ownership—as threatening the conception of shareholder interests in terms of property rights. In particular, …

The Modern Corporation As Social Construction, Mark S. Mizruchi, Daniel Hirschman

Seattle University Law Review

Classic works, Mark Mizruchi and Lisa Fein argued, share a particular fate. Authors often cite classic works without reading them—or without reading them carefully. . . . Yet perhaps no single work fits the above description better than one of the most important books on the large corporation ever published: Adolf Berle and Gardiner Means’s The Modern Corporation and Private Property. One can speculate that few works in the social sciences have been as often cited and as little read. As a consequence, we would expect The Modern Corporation to be a good candidate for either selective interpretation or …

Development Of A Framework To Evaluate Human Risk Towards Sustainable Risk Management, Ra'ed M. Jaradat, Rani A. Kady, C. Ariel Pinto

Engineering Management & Systems Engineering Faculty Publications

Risk managers are constantly faced with the challenge of making decisions at various levels of their organizations. One of the challenges, which often times is unavoidable, lies in assigning a monetary value to human risks. Such challenge necessitates engineering managers to make educated decisions on the level of risk that the organizations and businesses should accept when it comes to human. The purpose of this study is to suggest a suitable framework that captures this aspect of engineering Risk Management in order to make rational and sustainable decisions about such assessed risk. This will be accomplished by exploring the tools, …

Giving Voice To Values: How To Speak Your Mind When You Know What's Right (Book Review), Andra Gumbus

WCBT Faculty Publications

Book review by Andra Gumbus.

Gentile, Mary. Giving Voice to Values: How to Speak Your Mind When You Know What's Right. New Haven: Yale University Press, c2010.

ISBN 9780300161182

Backdated Stock Options Ownership Impact On The Corporation, Management, & Shareholders, Karen Cascini, Alan Delfavero

WCBT Faculty Publications

In the post-Sarbanes-Oxley Act (SOx) world, there has been an unprecedented crackdown on fraudulent activity occurring within corporate America. During recent years, many companies have granted stock options to their executives and employees as part of compensation packages. While the issuance of stock options as a component of compensation is considered to be a legal practice, corruption has taken this corporate resource to unlawful heights. Recently, numerous corporations have been in the news for potentially backdating stock options. Accordingly, the purpose of this paper is to distinguish between legal and illegal aspects of backdating stock options, and to examine the …

Should Individual Investors Use Technical Trading Rules To Attempt To Beat The Market?, Thomas S. Coe, Kittipong Laosethakul

WCBT Faculty Publications

Problem statement: Despite widespread academic acceptance of the Efficient Markets Hypothesis, some stock traders still use technical trading rules in an attempt to beat the market. Approach: This study looked at four trading rules, namely, the arithmetic moving average, the relative strength index, a stochastic oscillator and its moving average. These trading rules compare the relationship of current prices to past price patterns to generate a signal when to buy and sell stocks. The trading rules were tested over the years 2000-2009, a period of time that exhibited bull and bear markets, to determine if traders could actively …

Corporate Power In The Public Eye: Reassessing The Implications Of Berle’S Public Consensus Theory, Marc T. Moore, Antoine Rebérioux

Seattle University Law Review

We analyze Berle’s overall corporate governance project in accordance with what we see as its four core sub-themes: (A) the limitations of external market forces as a constraint on managerial decision-making power; (B) the desirability of internal (corporate) over external (market) actors in allocating corporate capital; (C) civil society and the public consensus as a continuous informal check on managerial decision-making power; and (D) shareholder democracy (as opposed to shareholder primacy or shareholder wealth maximization) as a socially instrumental institution. We seek to debunk the popular misconception that Berle’s early work was a defense of the orthodox shareholder primacy paradigm …

Corporate Social Responsibility And The Legal Profession, Eugene K. B. Tan

Research Collection Yong Pung How School Of Law

No abstract provided.

Why "Democracy" And "Drifter" Firms Can Have Abnormal Returns: The Joint Importance Of Corporate Governance And Abnormal Accruals In Separating Winners From Losers, Koon Boon Kee

Dissertations and Theses Collection (Open Access)

Do managers exercise accounting discretion in an opportunistic or efficient manner? Good governance structures, which mitigate agency costs, are necessary to ensure that the accounting information supplied by management is not opportunistically manipulated. The output of quality accounting information, in turn, serves as an input to better governance structures. Thus, governance and earnings quality (EQ) are inexorably linked through a complementarity relationship. This suggests two previously unexamined relationships. Firstly, the governance effects on performance in the influential paper by Gompers, Ishii and Metrick (2003) is overrated without good EQ, measured by the magnitude of abnormal accruals (AA), as an input. …

Why Does Corporate Governance Matter? Evidence From Seasoned Bond Offerings, Fang Wang

Dissertations and Theses Collection (Open Access)

To examine the importance of corporate governance, I look at how management and investors behave in the event of seasoned bond offerings, controlling for the corporate governance structure of issuing firms. I find that companies with the weakest governance structure aggressively manipulate their earnings upwards during the two years prior to the debt issuances. And when the bond offerings are announced to the market, these same firms experienced positive abnormal returns over a three day event period, indicating that investors of poorly governed firms value a debt financing for the alleged decrease in agency cost.

Does Corporate Governance Matter, Evidence From Earnings Management Practices In Singapore, Lingxu Hu

Dissertations and Theses Collection (Open Access)

This paper addresses two questions. First, do good corporate governance practices add values to company or does it lead to higher stock returns in Singapore? Second, does poorly governed listed company in SGX tend to manage their earnings by using discretionary accruals? Following the approach of Gompers et al. (2003), we formed two portfolios consisting of well-governed and poorly governed companies. Well governed companies are able to maintain a higher return relative to poorly governed companies. I also look at the firm valuation from the adoption of corporate governance practices. Our result shows a positive relationship between firm valuation and …

The Impact Of Employees' Perception Of Corporate Social Responsibility On Job Attitudes And Behaviors: A Study In China, Dan Zheng

Dissertations and Theses Collection (Open Access)

Corporate social responsibility (CSR) is regarded as voluntary bahaviors that contribute to the soceity welfare. Based on the concept of sustainable development, corporations should not only stress on their economic and business outcomes, but also pay attention to their effect on the society and environment. Corporations are expected to engage in the improvement of their employees' quality of life, as well as the well-being of employees' families, local communities, and the overall society. With the acceleration of global integration, CSR has become a main concern by the public, and is considered as an essential part of the business strategy. It …

Corporate Sustainability And The Recession: Firms' Strategy Response In A Financial Crisis, Carolyn M. Campbell

CMC Senior Theses

As the modern world deals with an increasing number of environmental and social crises, corporate sustainability is becoming ever more imperative for business. There is broad agreement that profit maximization can no longer be the exclusive goal of a company, with firms working to align environmental, social, and financial performance. Companies have demonstrated a wide variety of experiences in regards to the financial crisis and its effects on corporate sustainability. While some firms experienced serious setbacks in achieving environmental and social goals others firms claimed to have been ramping up sustainability efforts during the recession. However, most firms report that …

Clean, Green, And Not So Mean: Can Business Save The World?, Andy Spackman, Celia Ross, Christy Donaldson, Louise Feldman, Patrick Griffis, Elizabeth Stephan, Laurie Bridges, Baseema Krkoska, Tony Lin, Mark Siciliano

Library Faculty Research

No matter how you define it, corporate social responsibility (CSR) is a hot topic. From community investing to business ethics to environmental sustainability and beyond, proponents of CSR view the business landscape through a lens that focuses less on profitability and more on the greater good.

“Doing well by doing good” is the business world’s new mantra. Concepts of CSR, green business, social entrepreneurship, and peace through commerce have become a focus of research and are inspiring the next generation of businesspeople. The 2010 BRASS Program gave attendees an expert’s view of certain niches within the broader realm of ethical …

Corporate Governance And Earnings Management Before Share Repurchase Announcements In Singapore, Jian Ming Chua

Dissertations and Theses Collection (Open Access)

Share repurchase in Singapore was legalized in 1998. It is well known that investors view share repurchase as good news. This study is based on share repurchase announcements from 2006 to 2009. The mean Cumulative Market-Adjusted Returns (CAR) for the period [0, +1] and [-1, +1] are significant at 1.25% and 1.33% respectively. In Singapore, there are positive abnormal returns following share repurchase announcements in support of the ―free cash flow‖ hypothesis. By using the Singapore Corporate Governance Index as a proxy, the weakly governed companies exhibit the strongest, positive and significant CAR of 2.62% for the period [0, +1]. …

Tracking Berle’S Footsteps: The Trail Of The Modern Corporation’S Last Chapter, William W. Bratton, Michael L. Wachter

Seattle University Law Review

Readers game enough to work through all three hundred pages of The Modern Corporation and Private Property looking for insights on corporate law today encounter two, apparently contradictory, lines of thought. One line, set out in Books II and III, resonates comfortably with today’s shareholder-centered corporate legal theory. Here the book teaches that even as ownership and control have separated, managers should function as trustees for the shareholders and so should exercise their wide-ranging powers for the shareholders’ benefit. The other line of thought emerges in Books I and IV, where The Modern Corporation encases this shareholder trust model in …

Rethinking The Separation Of Ownership From Management In American History, Kenneth Lipartito, Yumiko Morii

Seattle University Law Review

In <em>The Modern Corporation and Private Property</em>, Adolf Berle and Gardiner Means would use AT&T as a prime example of what they saw as a dangerous new trend, the replacement of ownership-based capitalism with giant corporations controlled by a small group of propertyless managers. Indeed, AT&T became Berle and Means’ favorite example. . . . As we shall see, however, the claim that AT&T was a leading example of the separation of ownership from management is incomplete. More importantly, the common interpretation of Berle and Means’ work is mistaken, placing the emphasis incorrectly on the number of shareholders and reading …

Berle’S Vision Beyond Shareholder Interests: Why Investment Bankers Should Have (Some) Personal Liability, Claire Hill, Richard Painter

Seattle University Law Review

This essay, published in a symposium on the work of Adolf Berle, approaches the Berle-Dodd debate from the perspective that corporate managers have responsibilities beyond pursuing the interests of shareholders. Stock based executive compensation, designed to align managers’ interests with those of shareholders, has, in the investment banking industry in particular, failed to avert, and may have caused, managers (in this case, bankers) to take excessive risks that in the present financial crisis inflicted great damage on creditors and on society as a whole. We describe here the broad outlines of a proposal that we will discuss in future publications …

Enumerating Old Themes? Berle’S Concept Of Ownership And The Historical Development Of English Company Law In Context, Lorraine E. Talbot

Seattle University Law Review

This paper offers some tentative suggestions as to why Berle’s work has been read and interpreted so selectively in the United Kingdom. I suggest that this must be partly attributable to the historical developments in English company law that entrenched the notion of shareholder ownership claims. Specifically, unincorporated associations’ normative values—that members are owners and there is no distinction between small organizations with no share dispersal and large organizations with wide share dispersal—have a continuing influence on this entrenched notion of shareholder ownership claims. First, I provide an overview of the origins of English company law. Next, I address how …

International Movement To Deter Corruption: Should China Join?, Paul D. Carrington

Faculty Scholarship

Global concerns over the corruption of weak governments by firms engaged in transnational business are the source of an international movement that emerged in 1997. Special concern is presently directed at the weakness of enforcement of laws enacted in recent times to deter corrupt business practices in international trade that were enacted in response to that movement. One cause of weakness in law enforcement is the failure of China to share actively in those concerns and the efforts to address them. This essay will briefly record steps taken in other nations to address the concerns and the limited effectiveness of …

Bringing Freud To Fraud: Understanding The State-Of-Mind Of The C-Level Suite/White Collar Offender Through “A-B-C” Analysis, Sridhar Ramamoorti, Daven Morrison, Joseph W. Koletar

Accounting Faculty Publications

In this paper we use a primarily “behavioral lens” (cf. Ramamoorti, 2008; Ramamoorti & Olsen, 2007) to try to understand the state-of-mind and motivations of the C-level suite/white collar offender before, during, and after the perpetration of management fraud. We offer a useful conceptual approach called “A-B-C Analysis” to understand the incidence of fraud from individual and group perspectives, as well as more macro-oriented, cultural/contextual levels. It is our hypothesis that fraud occurs either because of an individual criminal’s calculated/intentional betrayal of trust, a duo or team of “bad boys” who push ethical envelopes, and/or an organizational/social/national culture of passivity, …

Legally Speaking--Legal Implications Of Reference Books For Publishers And Consumers, Bryan M. Carson

DLPS Faculty Publications

No abstract provided.

Turning A Small Residential Farm Into A Non-Profit Educational Organization, Thomas John Anderson

Agribusiness

This study was undertaken to determine whether Felicity’s Farm could become a non-profit organization for education. In order to determine the feasibility of turning Felicity’s Farm into a non-profit organization, interviews were conducted and financial statements were collected. In addition, a Certificate of Incorporation was completed based on the interview and financial data. It was concluded that Felicity’s Farm could become a non-profit organization; however, better organization of finances, fund-raising and the use of volunteers was recommended.

A Study Of Current Practice Of Corporate Social Responsibility (Csr) And An Examination Of The Relationship Between Csr And Financial Performance Using Structural Equation Modelling (Sem), Lorraine Sweeney

Doctoral

There has been a significant increase in interest in CSR in recent years (Gulyas, 2009; McGehee et al, 2009) and it is regarded as an important topic for research (Burton and Goldsby, 2009). Not only has this topic received academic attention but it is becoming a mainstream issue for many organisations (Renneboog et al, 2008; Nijof and Brujin, 2008). However, it has been noted that research on CSR in SMEs is quite scant (Burton and Goldsby, 2008; Cilberti et al, 2008). A second area of literature that remains unresolved is the relationship between CSR and financial performance (Park and Lee, …

Firm-Specific Knowledge Resources And Competitive Advantage: The Roles Of Economic- And Relationship-Based Employee Governance Mechanisms, Heli Wang, Jinyu He, Joseph T. Mahoney

Research Collection Lee Kong Chian School Of Business

The resource-based view of the firm emphasizes the role of firm-specific resources, especially firm-specific knowledge resources, in helping a firm to achieve sustainable competitive advantage. However, the deployment of firm-specific knowledge often requires key employees to make specialized human capital investments that are not easily redeployable to other settings. Thus, in the absence of effective safeguards and trust building devices, employees with foresight may be reluctant to make such specialized investments. This study explores both economic- and relationship-based governance mechanisms that might mitigate this underinvestment problem. Effective use of these governance mechanisms enables a firm to obtain greater performance from …

A Free And Undemocratic Press?, Stephen J. A. Ward

Center for the Study of Ethics in Society Papers

Papers presented for the Center for the Study of Ethics in Society Western Michigan University.

Regulation Of The Otc Derivatives Market: A Regulatory Proposal Of Cds, Erik Welin

WCBT Undergraduate Publications

According to many commentators the credit derivatives and especially CDS have been a leading cause to the development of the current financial crisis. During the last year, policy makers, regulators, and other commentators around the world have therefore focused their attention on how to regulate OTC derivatives and especially CDS.

The purpose of this paper is to analyze some of the proposed regulatory responses to OTC derivatives and especially CDS from an economic point of view. The paper proposes a twofold regulatory response. First it proposes that we return to the old common law rule of "rule against difference contracts". …