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2015 Vol.2,3
Corporate Governance and Corporate Ethics

2015/05/11

With regard to corporate governance, this paper first examines the question of what a corporation is and, based on this examination, then discusses the future direction of ideal corporate governance. Proper corporate governance results from (1) dropping the idea that firms’ goal is to maximize shareholder value and the idea that firms’ behavior can be attributed to individuals’ behavior and (2) considering a firm as a bundle of relationships and focusing on firms’ relationship with and presence in society. In terms of firms’ societal role, it is important to recognize indirect benefits for the stakeholders of firms. Also, with consideration given to firms’ relationship with and presence in society, this paper discusses outside directors and committee systems, both of which are frequent topics of conversation today. Corporate ethics should be examined with respect to firms’ relationship with and presence in society. Corporate ethics should not be regarded as the ethics of businesspersons. Corporate ethics do not necessarily coincide with the totality of businesspersons’ ethics and are normally required to exceed it. Maintaining the levels of both corporate governance and corporate ethics requires that firms engage in dialogue with society.

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