This article considers what policy reforms may help catalyze corporate commitment to combating corruption. The starting point for this discussion is a voluntary, corporate principles approach to self-regulation. Such an approach should seek to encourage corporations to implement effective compliance and ethics programs and to disclose information related to their anti-corruption activities to relevant stakeholders. Although a corporate principles approach is a private initiative, there is a significant role for the public sector. This article discusses some of the ways that the public sector can support and further the goals of a corporate principles approach to combating corruption. The reforms discussed in this article include amnesty programs for corporations that self-disclose corrupt payments, the use of corporate monitors in the enforcement of anti-corruption laws, expanding the definition of corruption in criminal laws, sustainability reporting indicators related to bribery, and the implementation of multi-stakeholder initiatives to support a corporate principles approach.

We examine how firms evaluate and compensate their chief financial officers (CFOs). CFOs participate in decision making much like other executives, but unlike most other executives they have fiduciary responsibilities for reporting firms’ financial results and safeguarding the integrity of financial reporting. Responsibility for financial reporting raises the question of whether it is appropriate to reward CFOs bonuses contingent on financial performance that is effectively self-reported. In this paper, we provide a framework that characterizes CFO incentive bonuses as a tradeoff between CFOs’ decision-making responsibilities and their fiduciary duties over financial reporting. This framework yields a number of implications which we examine empirically using a proprietary survey of CFO compensation practices of public and private firms. For instance, we find that from 2003 to 2007 public entities (relative to private entities) reduced the percentage of CFO bonuses contingent on financial performance. We interpret this result as evidence that firms mitigate earnings management or other misreporting practices in part by deemphasizing CFO incentive compensation.

We developed a model predicting that leaders are most effective in stimulating follower cooperation when they consistently treat all group members in a fair manner and are prototypical (i.e.. representative of the group's values and norms). In support of this idea, we consistently found that group members cooperated most when prototypical leaders treated themselves as well as their coworkers fairly across a laboratory experiment and 3 cross-sectional field studies. These findings highlight the important role of others fairness experiences and perceptions in influencing one's own reactions and also the role of leaders as representing the group's values and norms. We discuss implications for fairness theory and the leader prototypicality literature. [ABSTRACT FROM AUTHOR]; Copyright of Journal of Applied Psychology is the property of American Psychological Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The base of the pyramid (BoP) literature is grounded in the proposition of mutual value creation, an important but not yet well-tested relationship between business development and poverty alleviation. This paper begins to address this gap by assessing how business ventures serving BoP producers address local constraints and create mutual value. Using a case study methodology, sixty-four ventures are analyzed to identify the constraints faced by BoP producers. These are classified into productivity and transactional constraints. While the former set of constraints inhibits local value creation, the latter severely diminish the value capture potential of BoP producers. An in-depth analysis of eleven agricultural ventures provides insight into the strategies that ventures use to address constraints and enhance value creation and capture by BoP producers. The findings also indicate that alleviating constraints creates value not only for local producers, but also for the ventures themselves. [Copyright &y& Elsevier]; Copyright of Journal of Business Research is the property of Elsevier Science Publishing Company, Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Using a large sample of bank loans issued to U.S. firms between 1990 and 2004, we find that lower takeover defenses (as proxied by the lower G-index of Gompers, Ishii, and Metrick 2003) significantly increase the cost of loans for a firm. Firms with lowest takeover defense (democracy) pay a 25% higher spread on their bank loans as compared with firms with the highest takeover defense (dictatorship), after controlling for various firm and loan characteristics. Further investigations indicate that banks charge a higher loan spread to firms with higher takeover vulnerability mainly because of their concern about a substantial increase in financial risk after the takeover. Our results have important implications for understanding the link between a firm's governance structure and its Cost of capital. Our study suggests that firms that rely too much on corporate control market as a governance device are punished by costlier bank loans.

Scholars have shown renewed interest in the construct of courage. Recent studies have explored its theoretical underpinnings and measurement. Yet courage is generally discussed in its broad form to include physical, psychological, and moral features. To understand a more practical form of moral courage, research is needed to uncover how ethical challenges are effectively managed in organizational settings. We argue that professional moral courage (PMC) is a managerial competency. To describe it and derive items for scale development, we studied managers in the U.S. military and examined prior work on moral courage. Two methods were used to measure PMC producing a five dimensional scale that organized under a single second-order factor, which we termed overall PMC. The five dimensions are moral agency, multiple values, endurance of threats, going beyond compliance, and moral goals. Convergent and discriminant validity are analyzed by use of confirmatory factor analysis procedures. We conclude by presenting a framework for proactive organizational ethics, which reflects how to support PMC as a management practice.

Leader-managers face a myriad of competing values when they engage in ethical decision-making. Few studies help us understand why certain reasons for action are justified, taking precedence over others when people choose to respond to an ethical dilemma. To help address this matter we began with a qualitative approach to disclose leader-managers' moral motives when they decide to address a work-related ethical dilemma. One hundred and nine military officers were asked to provide their reasons for taking action, justifications of their reasons, and to explain these justifications. We used network analysis techniques to identify a hierarchical motive structure. The motive structure is a cognitive map that identifies ethical motives and perceptions of how these ethical motives relate to each other. The motives identified represent classic conceptualizations of moral behavior; namely, virtue theories, consequentialism, and deontological theories, along with another category that expressed the emotional significance of the moral judgment, which we refer to as emotional empiricism. [ABSTRACT FROM AUTHOR]; Copyright of Journal of Business Ethics is the property of Springer Science & Business Media B.V. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Human life is dependent upon the natural environment, which, most would agree, is rapidly degrading. Business enterprises are a dominant form of social organization and contribute to the worsening, and enhancement, of the natural environment. Scholars in the administrative sciences examine questions spanning organizations and the natural environment but have largely omitted the information systems perspective. We develop a research agenda on information systems innovation for environmental sustainability that demonstrates the critical role that IS can play in shaping beliefs about the environment, in enabling and transforming sustainable processes and practices in organizations, and in improving environmental and economic performance. The belief–action–outcome (BAO) framework and associated research agenda provide the basis for a new discourse on IS for environmental sustainability.

Our results highlight the importance of interaction among management, labor, and investors in shaping corporate governance. We find that strong union laws protect not only workers but also underperforming managers. Weak investor protection combined with strong union laws are conducive to worker–management alliances, wherein poorly performing firms sell assets to prevent large-scale layoffs, garnering worker support to retain management. Asset sales in weak investor protection countries lead to further deteriorating performance, whereas in strong investor protection countries they improve performance and lead to more layoffs. Strong union laws are less effective in preventing layoffs when financial leverage is high. [ABSTRACT FROM AUTHOR]; Copyright of Journal of Finance is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)