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Article
Publication date: 31 August 2010

Patrick A. McNutt

The purpose of this paper is to address the debate on an ethical foundation underpinning modern corporate governance and to argue that an ethical foundation is absent in the…

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Abstract

Purpose

The purpose of this paper is to address the debate on an ethical foundation underpinning modern corporate governance and to argue that an ethical foundation is absent in the definition of corporate governance. The paper recommends an applied Kantian philosophy.

Design/methodology/approach

The objective is achieved by introducing a Kantian morality and considering the distinction between accountability and responsibility in terms of fulfilling one's duty.

Findings

Individuals do have a sense of duty and sense of what is right and what is wrong from an ethical perspective. There is a need for a code of ethical practice (CoEP) in business to encourage individuals to apply their sense of duty at employees or management.

Research limitations/implications

The research ideas are limited to an ethical perspective that is based on a Kantian morality and the implementation of a code.

Practical implications

Some practical implications from the theory addressed in the paper include a CoEP and the introduction of a K‐profiling template at interview stage to assess the moral compass of a potential employee.

Originality/value

The paper opens the debate on the need for an ethical foundation or “moral metric” in corporate governance that goes beyond a public relations exercise.

Details

International Journal of Social Economics, vol. 37 no. 10
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 1 August 2005

Patrick A. McNutt and Charlie A. Batho

The purpose of this paper is twofold: first, to add to the debate on governance and, second, to describe a value set theory of the firm.

6519

Abstract

Purpose

The purpose of this paper is twofold: first, to add to the debate on governance and, second, to describe a value set theory of the firm.

Design/methodology/approach

The methodology has centred on good governance amongst employees – management and workers alike.

Findings

It is noted that committees are appointed in firms to ensure that good governance is practised across a range of issues to do with audit, remuneration and appointment. However, the debate on governance has largely overlooked the importance of good governance amongst all employees. It was found that governance at the employee level requires a code of ethics that is not just about right and wrong, but emphasises a contractual sense of duty to fellow employees as stakeholders in the firm. This defines the essence of obligation and duty within the stakeholder firm, the s‐firm.

Practical implications/limitations

One practical implication of the paper is that the practice of good governance at the employee level should begin by asking whether the employees as rational individuals in a state of nature would freely have agreed to the contract or work arrangement within the firm that obligates them to do X. A value set theory of the firm could assist employees by allocating responsibilities among all employees in such a way as to maximise joint effort.

Originality/value

The paper proffers a new approach to understanding governance and it concludes that every rational being is in the state of being an end in itself – a firm should teach people morality. An s‐firm teaches people morality. This is the quintessence of employee governance. The paper should be of value to shareholders, workers, management, trade unions and commentators on the theory of the firm.

Details

International Journal of Social Economics, vol. 32 no. 8
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 31 August 2010

Xavier Duran and Patrick McNutt

The purpose of this paper is twofold: first to add to the debate on trust and opportunism within transaction cost economics (TCE) and second to describe a partial solution, a code…

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Abstract

Purpose

The purpose of this paper is twofold: first to add to the debate on trust and opportunism within transaction cost economics (TCE) and second to describe a partial solution, a code of ethical practice (CoEP) originating in Kant's moral philosophy.

Design/methodology/approach

The methodology has centred on ethical values of right and wrong within an organisation in terms of fulfilling one's duty.

Findings

The contracting or exchange objective in any transaction is to arrive at a mutually satisfactory outcome, an equilibrium point. With opportunism, a free rider problem may well arise; if so, a partial solution emerges. This has to be avoided. In this paper, the authors focus on simple contracts as a solution, that is, an agreement‐as‐bargain in a CoEP not made in deed but made in reason, so that each party to the arrangement, has “dignity”. The avoidance of an ethical dilemma in not fulfilling one's duty is linked to the role of trust in TCE.

Practical implications

It is argued that the decision not to engage in opportunistic behaviour, for example, by any one individual, may be rooted in a personal sense of duty or influenced by the ethical values and beliefs embedded within the culture of the organisation or the firm. Management may therefore decide not to abuse their discretionary power; workers may opt not to shirk.

Originality/value

The paper builds on a new approach to understand governance and ethics insofar as a firm teaches people morality. This CoEP supports the role of trust in modern companies and links across to the literature on TCE. The paper should be of value to shareholders, workers and management, trade unions and commentators on the theory of the firm.

Details

International Journal of Social Economics, vol. 37 no. 10
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 1 January 1993

Patrick A. McNutt

Addresses the characteristics of an ideal society. In particular afair decision is defined as the indexed subset of liberty, justice andrights: if a decision is right, then it is…

Abstract

Addresses the characteristics of an ideal society. In particular a fair decision is defined as the indexed subset of liberty, justice and rights: if a decision is right, then it is fair, and, if it is fair, the decision is just. This line of reasoning is arrived at by introducing the new concepts of ethical asymmetry, altruism, dual disadvantage, preference criteria, moral complements and pairwise rights. Respect for individual rights is an important characteristic of the reasoning presented. The Samaritan regards the individual′s right as a claim right, justified by reference to a moral theory or to law. The Samaritan′s dilemma arises when, in resolving an individual right issue, cognizance must be taken of the public preference on the issue. The resolution of the issue can be attained with the presence of altruistic individuals.

Details

International Journal of Social Economics, vol. 20 no. 1
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 1 December 1996

Patrick McNutt

Considers a political economy dimension to government and governance in Northern Ireland. Political economy looks at the interrelationship between politics and economics in a more…

580

Abstract

Considers a political economy dimension to government and governance in Northern Ireland. Political economy looks at the interrelationship between politics and economics in a more complex political system as with devolved government in Northern Ireland. Written prior to the elections of May 1996, offers a background to the intriguing task of how to unravel the circumstances under which the citizens of Northern Ireland will confer legitimacy, that is, the circumstances under which they as citizens and voters do things because they think them right, correct, justified or worthy. The possibility of a prolonged and protracted period of negotiations is now a reality. Like so many other troubled places on earth, Northern Ireland needs politicians with vision. Asks if the representatives of the paramilitaries, the parapoliticians, can deliver that vision.

Details

International Journal of Social Economics, vol. 23 no. 12
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 1 September 1988

Patrick A. McNutt

This article is occasioned by the emerging literature on economics and ethics, and seeks to illustrate from a children's story one question, the answer to which is fundamental in…

Abstract

This article is occasioned by the emerging literature on economics and ethics, and seeks to illustrate from a children's story one question, the answer to which is fundamental in resolving some issues in the literature. Central to our thesis are the twin concepts of altruism and fairness.

Details

International Journal of Social Economics, vol. 15 no. 9
Type: Research Article
ISSN: 0306-8293

Article
Publication date: 31 August 2010

Elena Demidenko and Patrick McNutt

The purpose of this paper is twofold: first to add to the debate on good governance and ethics of enterprise risk management (ERM) and second to describe an ethical maturity scale…

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Abstract

Purpose

The purpose of this paper is twofold: first to add to the debate on good governance and ethics of enterprise risk management (ERM) and second to describe an ethical maturity scale based on duty and responsibility for practical implementation to ensure better governance.

Design/methodology/approach

The methodology has centred on risk governance as a way for many organisations to improve their risk management (RM) practices from an ethical perspective based on responsibility and on fulfilling one's duty within the organisation.

Findings

While companies in Australia, for example, are more mature than those in Russia in terms of governance systems life cycle, there are a number of common international challenges in risk governance implementation. These relate to a link between risk framework, enterprise value model and strategic planning; to a definition of risk appetite, the embodiment of RM in organisational culture, internal audit and ERM function, the evolving role of a chief risk officer (CRO) and senior management buy‐in and sponsorship of the integrated ethical RM from a chief executive officer.

Practical implications

ERM – a way for many organisations to improve their RM practices – is a key component of the applied ethics of corporate governance. It has developed into a philosophy to assist organisations with the process of protecting shareholders' value while also increasing the bottom‐line profitability. Effective ERM is based on ethical risk governance. Internal audit needs to be involved in the process of integrating RM and compliance. It should maintain a degree of independence when assisting with ERM establishment. CRO is most effective when reporting to the board.

Originality/value

Global companies are becoming more accountable to multiple stakeholders. It is the adoption of an ethical code to arrest the lack of clarity of roles ascribed to the audit committee and risk committee and management's accountability or lack thereof that remains the challenge across different jurisdictions. In attempting to implement good governance and meet the challenges, the paper introduces an ethical maturity scale as an internal measure that could be embedded in an organisation's strategy.

Details

International Journal of Social Economics, vol. 37 no. 10
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 1 December 1996

Patrick McNutt

Focuses on the indirect participation of the more marginalized and disenfranchised voters in a political system where discrimination and segregation in the supply of public goods…

489

Abstract

Focuses on the indirect participation of the more marginalized and disenfranchised voters in a political system where discrimination and segregation in the supply of public goods is a leading hallmark of political reality. Specifically, the non‐voters tend to be poorer, less well educated, younger and also disproportionately higher in minority and discriminated groups. There is instability in the political system and inevitably their detachment confers legitimacy to a political suborder, popularized by terrorism and paramilitary activity. Addresses the possibility of achieving equal control of the political agenda. The unelected representatives, referred to as the parapoliticians, of the marginalized and disenfranchised citizens, many of whom have had recourse to paramilitary activity, have to be included in the negotiations for a new political system. The accomplishment may be in electing a government but a greater accomplishment would be in revealing and unmasking who really governs. The parapoliticians are in a unique position to exercise agenda control which would restore stability to the political system.

Details

International Journal of Social Economics, vol. 23 no. 12
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 1 December 1996

Patrick McNutt and Mark Moran

The elections in Northern Ireland took place on 30 May 1996. The parapolitical parties must have a fair share of the seats in any new proposed electoral body. Comment on the…

Abstract

The elections in Northern Ireland took place on 30 May 1996. The parapolitical parties must have a fair share of the seats in any new proposed electoral body. Comment on the distribution of seats is difficult, however, as the concentration of seats in a supergroup of seven or ten and the redistribution of seats away from the lower group of five or eight parties is a more complex issue, bedevilled by a mixture of considerations of what is right, what is fair and what is representative.

Details

International Journal of Social Economics, vol. 23 no. 12
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 1 October 1996

Patrick McNutt

Evaluates the interplay between market forces and political realities as the economies of Europe become part of a new global order. Capital is becoming more mobile and business…

5632

Abstract

Evaluates the interplay between market forces and political realities as the economies of Europe become part of a new global order. Capital is becoming more mobile and business increasingly international and borderless. Modern management seek opportunities to reduce costs of production. The transnational firm (TNC), a globally integrated organizational network, has emerged in this global search for low‐cost production bases. Consequently the realm of European economic policy analysis is now very much couched within a political economy dimension which is determining the direction of economic activity at the global level with ramifications for the European economy and its nation‐states. The hallmarks of that political dimension include the interrelationships between sovereign governments and the transnational corporations and the creation of geo‐political entities like the European Union. Impelled by global competition and the power of business, the drive towards European integration has furnished much‐needed debate on the effectiveness of indigenous government policies on their respective economies and on the relatively greater impact of modern corporations on the economy.

Details

European Business Review, vol. 96 no. 5
Type: Research Article
ISSN: 0955-534X

Keywords

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