Business Law, Public Responsibility, and Ethics Commons^™

Corporate Governance, Public Accounting Firm And Multinational Corporation: The Us Sox Act Perspective, Marc Massoud, Eunsup Daniel Shim

WCBT Faculty Publications

The purpose of this paper is to review US corporate governance systems and to highlight the mandated roles of audit committee and external auditor within the SOX Act. In addition, it discusses requirements and implications of the SOX Act for the foreign accounting firms and multinational corporations. Finally this paper provides a perspective on improvement of corporate governance and financial integrity. In order to regain trust from the financial market, the SOX Act mandates (1) to improve auditor’s independence by reducing conflicts of interest; (2) to increase corporate financial reporting responsibility by requiring a CEO or a CFO certify accuracy …

Ethical And Managerial Implications Of Internet Monitoring, Andra Gumbus, Frances Grodzinsky

WCBT Faculty Publications

As Internet use pervades our personal and professional lives, organizations have become increasingly concerned about employee use of the Internet for personal reasons while at work. This has prompted the restriction of the Internet or the limitation of the Internet during work hours. Monitoring of employee Internet and email is another result of this trend. Legitimate business functions such as employee performance appraisal and progress toward goals are served by monitoring. However, poorly designed and communicated monitoring practices can be negative and have perverse effects on employee morale and productivity. Monitoring of employees erodes trust and may be considered an …

Legal History Meets The Honors Program, Robert B. Bennett

Scholarship and Professional Work - Business

In this article, the author discusses the "Law and Culture" course that he developed to teach in the Butler University Honors Program. The course looks at some landmark periods or events in legal history and explores how those events were the product of their culture, and how they affected their culture. Among the events or periods that the author has looked at in iterations of this course were the survival instinct on display in "Regina v. Dudley and Stephens," the Nuremberg trials, the Scopes Monkey Trial, the modern American litigation explosion, and the events surrounding the U.S. Supreme Court decision …

Ethical Attitudes Of Business Information Systems Students: An Empirical Investigation, Leila Halawi, Silva Karkoulian

Publications

This paper discusses attitudes toward ethical issues in information systems. Approximately 150 subjects were drawn from two populations: full-time undergraduate business information systems students and full-time master’s students. The subjects read a subset of six ethical scenarios. Hypotheses were tested for significant differences between the undergraduate students’ beliefs and those of graduate students, and female and male students who responded to the same scenarios.

On Public Versus Private Provision Of Corporate Law, Gillian K. Hadfield, Eric L. Talley

Faculty Scholarship

Law in modern market societies serves both democratic and economic functions. In its economic function, law is a service, a means of enhancing the value of transactions and organizations. Yet modern market economies continue to rely on the state, rather than the market, to provide this service. This paper investigates whether private provision of law may be superior to public provision. We look in particular at corporate law, where there is a substantial literature exploring the efficiency implications of "regulatory competition" and compare this competition with market competition between private providers. Drawing from the well-known framework of spatial models of …

Good Faith, State Of Mind, And The Outer Boundaries Of Director Liability In Corporate Law, Christopher M. Bruner

Scholarly Works

The Delaware General Corporation Law was amended in 1986 to permit shareholder-approved exculpatory charter provisions shielding corporate directors from monetary liability for certain fiduciary duty breaches not including (among other things) breaches of the duty of loyalty and acts not in good faith. This article examines the development of corporate fiduciary duty doctrine in Delaware leading up to and following this statutory amendment, focusing particularly on the Delaware courts' evolving conception of the meaning anddoctrinal status of the good faith concept employed in recent cases to permit a non-exculpable cause ofaction for conscious nonfeasance.

The article argues that Delaware's good …

The Exit Structure Of Venture Capital, D. Gordon Smith

Faculty Scholarship

Venture capital contracts contain extensive provisions regulating exit by the venture capitalists. In this Article, Professor Smith employs financial contracting theory in conjunction with original data collected from 367 venture-backed companies to analyze these exit provisions. He concludes that the combination of exit provisions in a typical venture capital relationship serves to lock venture capitalists into the investment during the initial stage. In later stages of the relationship, the venture capitalists acquire increasing control over exit by securing additional seats on the board of directors and by obtaining contractual exit rights. The result is a sophisticated transfer of control from …

Center For Professional Ethics, Winter 2005, Case Western Reserve University

Center for Professional Ethics

Incomplete draft of issue:

Table of Contents:

• The Race at Case: One Leg of a Long Marathon
• Truth and Trust in a Time of Continuing Change: A Talk by Caroline Whitbeck
• Religious Lawyering: Professor Russell Pearce Keeps His Faith
• News and Notes

Spare The Rod, Spoil The Director? Revitalizing Directors' Fiduciary Duty Through Legal Liability, Lisa M. Fairfax

Faculty Scholarship

It appears that our society has tacitly agreed to spare corporate directors any significant legal liability—which includes both financial and incarceration—for failing to perform their duties as board members. Thus, over the last twenty years, there has been a virtual elimination of legal liability—particularly in the form of financial penalties—for directors who breach their fiduciary duty of care. This is true despite the fact that we entrust directors with the awesome responsibility of monitoring all of America's corporations as well as the officers and agents within those corporations. More surprisingly, this tacit agreement against legal liability for directors has persisted …

School Desegregation 50 Years After Brown: Misconceptions, Lessons Learned, And Hopes For The Future, Gary Orfield

Center for the Study of Ethics in Society Papers

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

Client, Industry And Country Factors Affecting Choice Of Big N Industry Expert Auditors, Michael Ettredge, Soo Young Kwon, Chee Yeow Lim

Research Collection School Of Accountancy

This study investigates client choice of industry specialist auditors from among the Big N (Big 4 or 5) in an international (non-U.S.) setting. We investigate client-specific, industry-level and country-level factors hypothesized to enhance or decrease Big N clients' demand for industry expertise. Using data for 29 countries and 14 broad industries from 1993-2005, we find that international client choice of industry specialist Big N auditors is positively associated with client size, client growth opportunities, and client capital intensity. The choice of industry specialists from among the Big N is more prevalent in countries where levels of investor protection, quality of …

Negotiating A Commercial "Most Favored Nation" Clause, Stirling Adams

Brigham Young University International Law & Management Review

No abstract provided.

Too Little Or Too Much? Reexamining The Relationship Between Corporate Charitable Giving And Corporate Financial Performance, Heli Wang, Jaepil Choi, Jiatao Li

Research Collection Lee Kong Chian School Of Business

How do corporate charitable contributions affect corporate financial performance? Instrumental stakeholder theory posits that corporate giving can lead to high levels of corporate financial performance through improved stakeholder relations. In contrast, agency theory suggests that corporate giving diverts valuable corporate resources and inhibits corporate financial performance. Extant empirical studies that have examined the relationship found inconclusive results. We depart from and extend the existing literature in two main aspects. First, building upon the instrumental stakeholder argument and agency perspective, we develop the argument that there is an inverse U-shaped relationship between corporate charitable giving and corporate financial performance. Second, we …

Methods And Systems For Valuing A Business Decision, Sridhar Ramamoorti, Peter Freeman, Anurag Agarwal

Accounting Faculty Publications

Methods, systems, and processor instructions to determine a first direct cost associated with at least a partial implementation of a business decision, the first direct cost including at least one of productivity gains and losses, determine a second direct cost based on a non-implementation of the business decision, the second direct cost based on the productivity gains and losses, determine a first risk reduction associated with at least a partial implementation of the business decision, the first risk reduction based on a business relationship risk(s), determine a second risk reduction associated with a non-implementation of the business decision, the second …

Stormwater Utility Fees: Considerations & Options For Interlocal Stormwater Working Group (Iswg), New England Environmental Finance Center

Water

Stormwater utilities are a concept whose time seems to have arrived. Established by relatively few communities in the 1970s as a method of funding flood control measures, stormwater utilities now exist in over 400 municipalities and counties throughout the United States. During the next 10 years, their numbers are expected to swell dramatically – by one estimate to over 2,000 by the year 2014.

The reasons for this growth are multifold. Federal stormwater regulations passed in the 1980s (Phase I of the National Pollutant Discharge Elimination System Program, or NPDES), motivated many larger communities to seek alternative funding sources and …

Stormwater Utility Fees: Considerations & Options For Interlocal Stormwater Working Group (Iswg), New England Environmental Finance Center

Economics and Finance

Stormwater utilities are a concept whose time seems to have arrived. Established by relatively few communities in the 1970s as a method of funding flood control measures, stormwater utilities now exist in over 400 municipalities and counties throughout the United States. During the next 10 years, their numbers are expected to swell dramatically – by one estimate to over 2,000 by the year 2014.

The reasons for this growth are multifold. Federal stormwater regulations passed in the 1980s (Phase I of the National Pollutant Discharge Elimination System Program, or NPDES), motivated many larger communities to seek alternative funding sources and …

"Offshore” Or “Shorn Off”: The Oecd’S Harmful Tax Competition Initiative And Development In Small Island Economies, Richard Woodward

Books/Book Chapters

The difficulties of developing and executing a sustainable development program in Small Island Economies (SIEs) are well documented. Comparatively small domestic markets, remote export markets, a dearth of natural and human resources, susceptibility to environmental change and natural disasters, plus limitations on the state’s capacity to govern economic activity have narrowed the range of feasible development strategies resulting in a reliance on sectors vulnerable to the vicissitudes of the global economy.

Audit Quality, Legal And Disclosure Environments, And Analysts' Forecast Accuracy: Some International Evidence, Jong-Hag Choi, Tony Kang, Young Koan Kwon, Yoonseok Zang

Research Collection School Of Accountancy

In this study, we investigate the relation between the quality of external audit and earnings predictability of firms situated in different legal and disclosure environments around the world. In a sample of multinational firms cross-listed in the United States, we find that the association between audit quality and forecast accuracy is stronger in weak legal and disclosure environments than in strong legal and disclosure environments. We interpret these results as suggesting that audit service can serve as an alternative device to improve market participants' information environment in weak legal and disclosure environments.

The Exit Structure Of Strategic Alliances, D. Gordon Smith

Faculty Scholarship

Today, many biotechnology firms use strategic alliances to contract with other companies. This article contends that the governance structure of these alliances - specifically, the contractual board - provides an integrated restraint on opportunism. While an alliance agreement's exit structure could provide a check on opportunism by allowing the parties to exit at will, such exit provisions also can be used opportunistically. Most alliance agreements, therefore, provide for contractual lock in of the alliance partners, with only limited means of exit. Lock in, of course, raises its own concerns, and the contractual board - which typically is composed of representatives …

Who Owns The Medium Owns The Message? The Ambiguity Of The Right To Communicate In The Age Of Convergence, Aliaa Ibrahim Dakroury

Reconstruction: Studies in Contemporary Culture

In her essay on The Ambiguity of the Right to Communicate in the Age of Convergence, Aliaa Dakroury frames the issue mediation in terms of media ownership and control. The question asked in the title -- Who Owns the Medium Owns the Message? -- in its rhetorical rather than literal form, indicates the skepticism with which Dakroury approaches too narrow a vision of determination. In the terms of his case study, this means questioning the apparent incommensurability of the economic convergence of multi-national media conglomerates and the right to communicate. To do so, Dakroury offers substantial analyses of both the …

Live Virtual Reference And The Database Dilemma, Jennifer Mcclure

The Southeastern Librarian

Live virtual reference programs in the university setting have blossomed in recent years as librarians have aspired to become as “virtual” as the resources they offer. While some libraries have chosen to limit their service to affiliated members, many have preferred to open their programs to the wider community. The motivation to do so is perhaps particularly strong among public university librarians, who often feel a dual responsibility to their own affiliates and to the citizens of their state. However, the decision to offer a chat reference service to the public raises a number of legal, ethical, and practical questions …

The Impact Of Ownership Structure On Wage Intensity In Japanese Corporations, Toru Yoshikawa, Phillip H. Phan, Parthiban David

Research Collection Lee Kong Chian School Of Business

The authors studied the effect of ownership structure on human capital investments as indicated by wage intensity, defined as the ratio of expenditure on employee wages to sales, in a sample of 996 Japanese manufacturing firms during their economic recession of 1998-2002. They found that domestic shareholders, with interests beyond financial considerations, enhance wage intensity, especially when performance is low, and thereby safeguard human capital investments. Foreign shareholders with sole interest in financial returns have an opposite effect; they reduce wage intensity when firm performance is low.

A New Interpretation Of The Contemporaneous Ownership Requirement In Shareholder Derivative Suits: In Re Bank Of New York Derivative Litigation And The Elimination Of The Continuing Wrong Doctrine, Terence L. Robinson Jr.

BYU Law Review

No abstract provided.

The Effects Of Ownership And Capital Structure On Board Composition And Strategic Diversification In Japanese Corporations, Toru Yoshikawa, Phillip H. Phan

Research Collection Lee Kong Chian School Of Business

The board of directors plays an important role in solving the agency problem between shareholders and management. This paper investigates the relationships between ownership and board structure with the diversification strategy of large Japanese firms. The results show that corporate nominee directors are associated with lower levels of product diversification of their investee firms. This suggests that nominee directors in large Japanese corporations see themselves representing specific interests and therefore investors should pay attention to board composition in order to assess the level of protection they can expect to receive. Even without any apparent agency problem with management, there remains …

On The Relevance Of Political Philosophy To Business Ethics, Jeffrey Moriarty

Philosophy Faculty Publications

The central problems of political philosophy (e.g., legitimate authority, distributive justice) mirror the central problems of business ethics. The question naturally arises: should political theories be applied to problems in business ethics? If a version of egalitarianism is the correct theory of justice for states, for example, does it follow that it is the correct theory of justice for businesses? If states should be democratically governed by their citizens, should businesses be democratically managed by their employees? Most theorists who have considered these questions, including John Rawls in Political Liberalism, and Robert Phillips and Joshua Margolis in a 1999 article, …

Proposed Management Arrangements For The West Coast Commercial 'Wetline' Fishery. A Discussion Paper., West Coast And Gascoyne Management Planning Panel

Fisheries Management Papers

The ‘Wetline Review’ was established to implement an effective management framework for the commercial sector to complement the recreational initiatives. It must be stressed at the outset that this review is focussed on the take of scalefish by the commercial sector. The levels of use between the various user groups in the West Coast region will be examined under the new integrated fisheries initiative following the implementation of new management arrangements for scalefish taken by the commercial sector.

Management Of The Proposed South West Beach Seine Fishery. Management Discussion Paper., Department Of Fisheries

Fisheries Management Papers

This Management Discussion Paper for the proposed South West Beach Seine Fishery is designed to inform the fishing community and general public about the issues and management proposals relating to the South West Beach Seine Fishery (the fishery). The Department of Fisheries (the Department) encourages comment about the issues raised and the proposed management recommendations in this report.

Do Ceos Get Paid Too Much?, Jeffrey Moriarty

Philosophy Faculty Publications

In 2003, CEOs of the 365 largest U.S. corporations were paid on average $8 million, 301 times as much as factory workers. This paper asks whether CEOs get paid too much. Appealing to widely recognized moral values, I distinguish three views of justice in wages: the agreement view, the desert view, and the utility view. I argue that, no matter which view is correct, CEOs get paid too much. I conclude by offering two ways CEO pay might be reduced.

Fulfilling Our Obligation: Perspectives On Teaching Business Ethics, Sheb L. True, Linda Ferrell, O.C. Ferrell

KSU Press Legacy Project

This anthology offers a myriad of perspectives on teaching business ethics. The authors are business and philosophy faculty, business school deans, industry practitioners, and a representative of AACSB International. Most chapters were inspired by presentations taking place at the 2004 Teaching Business Ethics Conference, which was sponsored by AACSB International, University of Colorado, Colorado State University, and University of Wyoming.

The intent of Fulfilling Our Obligation: Perspectives on Teaching Business Ethics is not to offer a definitive answer demanding allegiance by all educators and academic institutions; rather, the goal is to provide a means of furthering exploratory discourse on the …

Basel Ii And The Need For Bank Distress Resolution Procedures, Clas Wihlborg

Business Faculty Articles and Research

It is argued that without increased market discipline Basel II is not likely to resolve the regulatory problem caused by explicit and implicit guarantees of depositors and other creditors of banks. One way to enhance market discipline is to implement proposals for mandatory subordinated debt. For these proposals to achieve their objective, the non-insurance of holders of subordinated debt must be credible. Increased credibility of non-insurance of one or several groups of creditors could be enhanced if distress resolution procedures for banks were pre-specified, and if they made possible bank failures without serious disruption of the financial system. The existence …